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Report to the Assistant Treasurer
Inspector-General of TaxationDecember 2010
Review into the Australian Taxation Office’s Change Program
Review into the Australian Taxation Office’s Change
Program
Report to the Assistant Treasurer
December 2010
Commonwealth of Australia 2010
ISBN 978-0-642-74661-0
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the:
Commonwealth Copyright Administration Attorney General’s Department 3-5 National Circuit BARTON ACT 2600 Or posted at: http://www.ag.gov.au/cca
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Telephone: (02) 8239 2111 Facsimile: (02) 8239 2100
Level 19, 50 Bridge Street Sydney NSW 2000
GPO Box 551 Sydney NSW 2001
3 December 2010
Mr the Hon Bill Shorten MP Assistant Treasurer Parliament House CANBERRA ACT 2600 Dear Minister, On 19 April 2009, the former Assistant Treasurer directed me to conduct a comprehensive review of the Australian Taxation Office’s (ATO) Change Program. In response, I commenced the review with a staged approach due to the size of the task, my current resources, the need to expeditiously deal with the most pressing concerns as identified by the former Assistant Treasurer and other related reviews either already in progress or completed. Consequently, this report focuses mainly on the impact on taxpayers and tax practitioners of the income tax release, the latest part of the Change Program to be deployed. Once you have released this report, consideration may be given to whether there is a need to proceed with further reviews of the Change Program.
The Change Program was a large and complex Information and Communication Technology (ICT) project that has taken approximately seven years during which time it has been subject to constant change with components being removed or added to the initial scope. The review identifies a number of major risks associated with the projects and, generally, finds that the ATO developed appropriate mitigation strategies, although some areas of improvements have been identified in this report.
Other key findings of the review relate to the timing of the income tax release and the ATO’s related communications with taxpayers, tax practitioners and their representatives. Specifically, at the time of deployment, the ATO found itself in an invidious position where testing would be effectively extended into production. Having found itself in such a position, based on the independent assurers’ opinions, the contractor and the ATO itself as well as the cost and risk of further delay for only diminishing returns, I have concluded that, the ATO had little choice but to go live when it did. However, as acknowledged by the ATO, significant risk of potential adverse impact on taxpayers and tax practitioners could have been better communicated to them.
The remit of the Inspector-General of Taxation does not extend beyond the Australian tax administration system and whilst this report explores the ATO’s experience, broader consideration are raised for the Government in relation to large ICT projects that may be undertaken by other Government agencies. In particular, the first recommendation, the only one to be addressed to the Government in this report, relates to governance and scrutiny functions of large ICT projects as well as related intra-government agency information exchange issues. We appreciate that some of these matters may fall outside your portfolio and you may refer it to other Ministers for consideration.
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The report contains eight other recommendations which are all addressed to the ATO. The ATO has agreed with six of them, partly agreed with two and disagreed with another that recommends that the ATO consults with tax practitioners over its reconsideration of compensation claims.
I offer my thanks to the support and contribution of tax practitioners, their professional bodies, other Government agencies and individuals to this review. The willingness of many to provide their time in preparing submissions and discussing issues with myself and my staff is greatly appreciated. I also thank ATO officers for their professional cooperation and assistance in this review.
Ali Noroozi Inspector-General of Taxation
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TABLE OF CONTENTS
CHAPTER 1 — INTRODUCTION .................................................................................................. 1
CHAPTER 2 — BACKGROUND TO THE ATO CHANGE PROGRAM ................................................ 3
Genesis .................................................................................................................................. 3
The contract ........................................................................................................................... 5
Timeframes for ATO Change Program completion ................................................................ 8
Key release elements ........................................................................................................... 10
CHAPTER 3 — ATO INCOME TAX RELEASE — EVENTS LEADING UP TO DEPLOYMENT, DEPLOYMENT AND IMPACTS ON TAXPAYERS AND TAX PRACTITIONERS ................. 15
Events leading up to the income tax release’s deployment ................................................. 15
ATO income tax release’s deployment ................................................................................. 47
Taxpayer and tax practitioner experiences with the new system during February-June 2010 ............................................................................................................. 49
Reconciliation of the main problems encountered by the ATO with the ATO’s public communications ......................................................................................................... 69
ATO experience of problems over February — June 2010 .................................................. 69
Tax practitioner calls for reparation and the ATO’s response .............................................. 76
TaxTime 2010 (July 2010 to October 2010) ......................................................................... 82
CHAPTER 4 — IGT OBSERVATIONS AND RECOMMENDATIONS .................................................. 85
The Change Program — a large, complex information and communications technology (ICT) project ....................................................................................................... 85
Large ICT project — risk return or cost benefit decision ...................................................... 86
ATO income tax release and ATO communications ............................................................ 92
Change Program impacts on ATO staff ............................................................................. 110
The ATO’s ICT capability development and ongoing care and maintenance of the new systems ................................................................................................................. 111
Implementing new Government tax and retirement savings policy in the new ICT environment ................................................................................................................. 112
Changes in scope of the Change Program ........................................................................ 113
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EXECUTIVE SUMMARY
In response to the former Assistant Treasurer’s direction, issued on 19 April 2010, and concerns raised by taxpayers, tax practitioners and their representative bodies, the Inspector-General of Taxation (IGT) undertook this review which was mainly focused on the impact on taxpayers and tax practitioners resulting from the income tax release of the Australian Taxation Office’s (ATO) Change Program.
In conducting this review, the IGT has relied on the reports made by the ATO’s independent assurers, Capgemini and Aquitaine Consulting, and the Release 3 post-implementation reviewer, CPT Global. We have also relied on interviews with the contractor, Accenture, past and present ATO officers and the ATO’s own documentation.
The Change Program was an ambitious and far-reaching project aimed at delivering a range of significant capabilities to the ATO’s Information and Communication Technology (ICT) systems in order to ensure effective administration of the taxation and superannuation laws into the future. At the outset, the IGT acknowledges the commitment from ATO staff and contractors on a sustained basis over a number of years to achieve the deliverables of the Change Program to date.
The Change Program was a large and complex ICT project that has taken approximately seven years during which time it has been subject to constant change with components being removed or added to the initial scope. There were a number of key risks associated with the projects and, generally, the ATO developed appropriate mitigation strategies although some areas of improvement have been identified in this report. In particular, based on the learnings from the Change Program, the first recommendation raises a number of matters, including governance and scrutiny functions as well as intra-government agency information exchange issues, for the Government to consider in relation to future large or significant ICT projects.
In relation to the timing of the income tax release, the ATO found itself in an invidious position where testing would be effectively extended into production. Having found itself in such a position, based on the independent assurers’ opinions, the contractor and the ATO itself as well as the cost and risk of further delay for only diminishing returns, the IGT has concluded that the ATO had little choice but to go live when it did. However, as acknowledged by the ATO, significant risk of potential adverse impact on taxpayers and tax practitioners could have been better communicated to them.
The ATO did carry out its planned communication and intelligence collection strategy which included providing information to taxpayers and tax practitioners. However, this plan and subsequent ATO communications ultimately proved to be inadequate in alerting the taxpaying community to adopt strategies that would minimise any potential adverse impacts.
The report also seeks to address the issue of compensation for those adversely affected and a number of recommendations are made to the ATO in this regard. The report also
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contains findings in relation to impact on ATO staff and recommends that the ATO address these by conducting open and frank consultation with its staff.
An ATO commissioned report, issued on 22 September, quantifies some benefits of the Change Program and expects further benefits in the short term which would accumulate into the future. It may be useful to conduct a further cost/benefit analysis sometime after the Change Program work is completed and the new ICT systems have achieved full functionality and are well-settled operationally. In the meantime, there are likely to be many ongoing opinions on what should be considered in such an assessment and the range of costs that should be included. To this end, as a starting point, the ATO has agreed to publicly release its commissioned report which should promote open and transparent discussion in this regard.
CHAPTER 1 — INTRODUCTION
1.1 On 19 April 2010, the former Assistant Treasurer directed the Inspector-General of Taxation (IGT) to review and report on the Australian Taxation Office’s (ATO) Change Program1. An extract from the Minister’s announcement of this direction is stated:
I want a comprehensive review of what has been occurring with the implementation of the Tax Office's IT upgrade, known as the Change Program. The Tax Office is completely independent so I personally cannot direct in relation to the issues that have been brought to my attention, that's why I have directed the Inspector General to step in and immediately review the program. The Terms of Reference are wide-reaching to ensure that all aspects of the program are investigated. In particular, I want a clear understanding on how taxpayers have been affected.
1.2 In response to the former Assistant Treasurer’s direction and concerns raised directly by taxpayers, tax practitioners and their representative bodies, the IGT commenced this review pursuant to subsections 8(2) and 8(1) of the Inspector-General of Taxation Act 2003 (IGT Act 2003), respectively.
1.3 The IGT announced submission guidelines for this review on 5 May 2010, extracts of which are outlined below.2
1.4 The IGT submission guidelines advised that a staged approach would be undertaken, focusing initially on the impact on taxpayers and tax practitioners as a result of the latest release—that is, the part of the Change Program that relates to processing of income tax returns and refund payments (the income tax release). Once this report is released by the Minister, consideration can be given to whether there is a need to proceed with further reviews of the Change Program as identified in this report.
1.5 The IGT submission guidelines also observed that the ATO deployed the income tax release in January 2010 and that taxpayers, tax practitioners and their representatives have raised concerns about instances of extended delays and errors arising from the income tax release. These concerns included the ATO’s inability to fix identified errors within reasonable times, the nature of the ATO’s communication of the errors, the ATO’s shifting advice on the timeframes to fix those errors and the ATO’s lack of awareness of the impact that such errors and delays as well as associated communications were having on taxpayers and tax practitioners.
1.6 The IGT submission guidelines explained that the review will examine the basis for, and the ATO’s management of, such concerns. This will provide a basis for
1 Sherry, N., Terms of Reference of Inspector-General of Taxation Review into Tax Office's Change Program, media release No. 065, 19 April 2010, available at www.treasurer.gov.au.
2 The IGT submission guidelines are reproduced in full in Appendix 2.
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conclusions to be drawn and, where necessary, recommendations of best practice to be made in order to minimise similar problems arising in the future.
1.7 In response, the IGT has received over 90 submissions from taxpayers, tax practitioners and their representatives, ATO staff and their representatives, and the Commonwealth Ombudsman. The IGT also met with members of the community and organisational bodies who made submissions, to further understand their experiences and concerns. These are listed in Appendix 3.
1.8 The IGT interviewed the ATO’s independent assurers to the Change Program, Capgemini and Aquitaine Consulting, the ATO’s independent contractor who reviewed the implementation of the income tax release, CPT Global, and the ATO’s information and communication technology (ICT) contractor, Accenture. The IGT interviewed a number of current and former ATO staff and examined ATO systems to determine the underlying causes for community concern. The IGT also discussed these matters with a range of interested external stakeholders.
1.9 On 13 May 2010, the Senate agreed to a Notice of Motion requesting the IGT to produce a progress report on the review by no later than 15 September 2010, with a final report to be publicly released no later than 31 October 2010. Although the IGT is not compelled to comply with such a request, the IGT has endeavoured to complete this report as close to this date as possible given the framework and limited resources within which the IGT operates.
1.10 Since the Change Program is a complex, multifaceted development, it is very difficult to appreciate its nature without understanding its evolution. Accordingly, the report commences by providing a historical background in Chapter 2.
1.11 The report then focuses on the events both leading up to, and following, the deployment of the income tax release (the most substantial deliverable under the Change Program contract) in Chapter 3.
1.12 The IGT’s observations, findings and recommendations that have been formed at this stage of the review are set out in Chapter 4.
1.13 This report is produced pursuant to section 10 of the IGT Act 2003. In accordance with section 25 of that Act, the Commissioner of Taxation was provided with an opportunity to give submissions on any implied or actual criticisms contained in this report. The Second Commissioner of Taxation has responded on his behalf and that response is reproduced in Appendix 15.
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CHAPTER 2 — BACKGROUND TO THE ATO CHANGE
PROGRAM
2.1 The ATO is the principal administrator of Australia’s taxation and superannuation systems. In 2008-09, this involved employing around 22,400 ATO officers, obtaining $265.4 billion in net cash collections, making almost $17 billion in payments and transfers, as well as interacting with over 20 million taxpayers and payment recipients. To a significant extent, the ATO relies on substantial information and communication technology (ICT) to effectively administer these systems.
2.2 In the late 1990s and early 2000s, the ATO became increasingly concerned that it could not continue to effectively administer the taxation and superannuation systems into the future without making major changes to its ICT.
2.3 The ATO’s management decided that the core tax systems had to be replaced. As a consequence, on 2 December 2003, the ATO entered into a head agreement with Accenture to deliver products and services for the Change Program. A number of work orders were placed with Accenture for phase 1 and 2 of the program including design, management arrangements and environments. In December 2004, a contract was entered into for phase 3 with Accenture for a fixed price not to exceed $230.7 million (exclusive of GST) to deliver certain outcomes when replacing a range of ICT systems. The ATO business case estimated total costs for the Change Program, including Accenture’s fees, to be $445 million.
2.4 The contract (and an ATO publication, The Australian Taxation Office: Change Program) gives a definition of the ‘Change Program’, which is reproduced in Appendix 1.
2.5 Initially, the contract was intended to be completed by June 2008. As at September 2010, although the contract had formally finished on 30 June 2010, warranty work under the contract was still ongoing and expected to finish in June 2011. Significant changes in scope have occurred and the total ICT business case, as at 31 July 2010 cost $756.7 million, including Accenture’s fees of around $677 million.3
GENESIS
2.6 The Change Program arose following the community’s reaction to the ATO’s implementation of the GST in 2000. In response, the ATO sought to better understand the underlying reasons for the difficulties it had in implementing the new policy, the frustrations expressed by the broader tax community, as well as determine what the community wanted in their interactions with the tax administration system.
3 Note that the program would have cost more if the Business Activity Statement and Superannuation Guarantee builds were not excluded from the scope of the project in 2010.
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2.7 As this ATO enquiry progressed, it discovered through its interactions with tax practitioners that it was able to deliver significant improvements to the system by building an online ‘portal’. This also facilitated a discussion with tax practitioners on the broader design of the tax administration system.
2.8 In early 2002, the ATO commissioned further work, such as the Listening to the Community Program, to understand the expectations of a variety of stakeholders in dealing with the ATO. This work culminated in the ATO’s Easier Cheaper More Personalised Program that identified key irritants and impediments to ideal tax administration.
2.9 In July 2003, the ATO published a document, Making it easier to comply. It proposed a three-year program outlining how the ATO would provide easier, cheaper and more personalised interactions, information and advice for individuals, business and tax practitioners. It aspired to deliver a ‘user-based system’ and set out key principles to guide the design and development of the new products and services.
01 — You will be able to do business with us online — whether through our services or your commercial services
02 — You will have online access to information that is personal to your dealings with us
03 — You will deal with a tax officer who has an understanding of your dealings with us and, in some cases, your industry
04 — You will receive notices and forms that make sense in your terms and that reflect your personal dealings with the revenue system
05 — You will receive high quality responses to your issues and interactions along with quick turnaround times
06 — We will be reasonable about the level of record keeping required that is necessary for you to practically comply with your tax obligations
07 — We will facilitate the use of commercial services developed to ease the cost of your record keeping and compliance with the law
08 — You will experience compliance action which takes into account your compliance behaviour, personal circumstances and level of risk in the system.
If you are a tax agent we will also acknowledge the important role you play in the administration of our revenue laws and will develop an open and constructive relationship with you, recognising your practice management issues in our administrative design.4
2.10 The ATO was aware at that time that its existing ICT systems (or legacy systems) were outmoded and inadequate for the purpose of delivering these principles. The legacy systems were very inflexible in their design structure. For example, it was difficult and costly to make even small changes, such as changing the
4 Australian Taxation Office, Making it easier to comply, Canberra, July 2003, pp. 6-7.
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names of the Deputy Commissioners in standard correspondence, which required changes to the underlying software. In short, a large range of problems had been identified with the ATO’s existing ICT systems, as a result of which the ATO management considered a broader initiative for changes to them.
2.11 In December 2003, the ATO formally decided to embark on a major program of ICT changes to replace its front-end systems (such as online external interfaces, telephony services and internal case management systems), back-end systems (involving integration of its accounting engines) and other systems (such as the various and disparate mainframe systems) with systems such as the tax agents’ portal, a single case management system and an integrated core processing (ICP) system.
THE CONTRACT
2.12 The ATO sought contractors to deliver its Change Program in 2003. There were three main bidders: American Management Systems (AMS), Booz Allen Hamilton and Accenture. AMS had implemented a system in the USA but did not offer in-country support to Australia. Booz Allen proposed to map the ATO’s business processes and then subcontract to software developers to build systems to suit those processes. Accenture proposed to deliver a similar system to that which they had implemented in other countries, such as their recent implementation of the Tax Administration System (TAS) in Singapore.
2.13 The ATO was impressed with aspects of the TAS’ design. The system was based on categories of functionality that employed a form design structure, requiring changes only within the form design structure architecture to the business specifications (and not the hard code) for different revenue products. The Singapore tax administration agency was willing to share its design documentation with the ATO. Accenture also undertook to bring the same key personnel that had implemented Singapore’s system to Australia to design and build a similar system adapted for Australia’s tax administration system.
2.14 Significant improvements were required to the ATO’s existing ICT legacy systems. By way of example, new ‘slices’ of hard code had to be written to update changes to the system for each year’s—TaxTime5. For core legacy systems, such as the ATO’s National Taxpayer System (NTS), this has accumulated over the years to over 7.5 million lines of code. This is pictorially represented in the diagram below.
5 ‘TaxTime’ is an expression the ATO uses to denote the individual income tax lodgement period (July-October) and the work done in preparation for that period.
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The ATO’s National Taxpayer System (NTS)
NTSCore
TaxTime200n…
TaxTime2004
TaxTime2005
TaxTime2006
TaxTime2007
TaxTime2008
Approx 7.5 million lines of code• Growing each Tax Time• New TT code to some degree is lower risk as it is a separate silo• Overall complexity is increased due to increasing amount of code • Architecture is not complex• Testing predominately focused on new TaxTime code added and need for limited
regression testing
Source: CPT Global, Release 3—Income Tax Implementation Review, report to the Australian Taxation Office, August 2010, p. 13.
2.15 However, the architecture for the new system, as depicted below, would rely on a combination of a ‘code library’ that would perform certain functionalities (such as registration, assessments, etc.) and a configuration based on the business requirements for the particular revenue products. This meant that the new system would avoid the need for new code to be written if the design of new tax policies was consistent with the administrative delivery of current policies. In these circumstances, only changes to the configuration based on changed business requirements, would be needed.
The ATO’s Integrated Core Processing System (ICP)
ICP Core
Configuration Tables
Approx 1.5 million lines of code • ICP core should not increase significantly
• Supports a number of other taxation products other than Income Tax (NTS) such as Superannuation.
• TaxTime changes should be table or configuration rules changes and additions
• Architecture and Code will remain as highly complex
• Testing requirements are now more complex and there is an increased need for regression testing
Source: CPT Global, Release 3 — Income Tax Implementation Review, report to the Australian Taxation Office, August 2010, p. 13.
2.16 The ATO considered that it could minimise the technological and execution risk by contracting a party with proven ability to deliver a system that had worked elsewhere, rather than starting with a ‘blank sheet’.
2.17 In negotiating the contract, the ATO also considered that it had taken steps to minimise the contractual risks of overspend by requiring Accenture to deliver defined outcomes (rather than a set of system specifications) for a fixed price not to exceed $230.7 million. These outcomes were:
An integrated processing system (people/process/technology) for all ATO products
An effective active compliance and advice capability
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Effective, improved client service
Improved enterprise-wide outcome management of work
Delivery of ATO business
A system with integrity and performance
Productivity and sustainability benefits
The program delivered effectively and professionally.
2.18 The fixed price contract was aimed at giving the ATO more certainty around the cost of the program. Therefore, if the outcomes took more work than previously thought, the contractor would bear that cost. However, any approved changes to the contract (Change Requests) were at an additional cost to the ATO.
2.19 The form of the contract was a combination of a ‘head of agreement’, or a standing offer, setting out overarching terms and conditions with ‘Work Orders’ that specified contractual performance in relation to certain products, including more clearly defining the outcomes as they related to the Work Orders’ subject matter.
2.20 The contract payment or reward structure had various aspects incorporated to provide incentives to deliver the required outcomes. Specific payments were tied to satisfactory completion of certain milestones and warranty periods. Any variations to the contract were to be negotiated through a ‘Change Order’ and given effect through a Change Request.
2.21 The scope of the contract was to deliver, amongst other things:
case and management systems, and
a single ICP system for a range of revenue products.
2.22 At the outset, the replacement of the superannuation systems was specifically excluded from the scope of the contract. These systems were intended to be replaced after the finalisation of the Change Program.
2.23 The ATO intended to progressively implement the components of the Change Program, starting with the relatively easier deliverables that would have a larger beneficial impact in the community. It was intended that this approach would also allow the ATO and Accenture to ‘build upon success’.
Initial costs and expected benefits
2.24 The initial total cost for the Change Program business case (including the contract with Accenture) was approximately $445 million. The ATO was to fund this from its own budget. No new Government funding was to be provided.
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2.25 The total cost for the business case included funding for around 250 ATO staff, dedicated to implementing the Change Program, at a cost of around $30 million per year.
2.26 The overall expected benefits of the Change Program initially were worth $70 million in 2007-08 with additional benefits worth approximately $130-170 million for each year thereafter. The ATO also considered that there would be other less visible benefits that would extend many years into the future. The ATO’s actual costs and benefits analysis has been the subject of further consideration more recently. This is discussed later in the report.
Governance arrangements
2.27 It should be noted that until August 2006, Government agencies were not obliged to subject certain ICT projects to independent Government gateway review. Such reviews require a person independent from the Government agency to assess at critical stages whether the performance of the contract is on track to deliver the original business case.
2.28 For independence reasons, as well as for effective management of the Change Program, the ATO engaged an independent assurer, Capgemini, who had systems integration experience matching that of the contractor, to assist the ATO recognise and address risks and issues. A condition of the independent assurer’s contract was that the assurer could play no further part in the Change Program and therefore could not compete with the contractor for delivery of the systems.
2.29 The ATO also established an internal governance arrangement under the oversight of the Change Program Steering Committee (CPSC), chaired by the Commissioner, which met at least monthly. Underneath this steering committee were a number of other committees and groups that brought together a whole range of ATO officers across the operational areas, compliance areas and people working on the Change Program. The details of the governance arrangements set up by the contract are set out in Appendix 4.
2.30 From June 2008, the ATO also contracted an additional independent assurer, Aquitaine Consulting (Aquitaine), to assist with the Change Program.
TIMEFRAMES FOR ATO CHANGE PROGRAM COMPLETION
2.31 The ATO had initially intended to complete the Change Program within three years. This was to minimise the risk of Government implementing new policy which would force the ATO to reallocate resources away from the Change Program.
2.32 At the outset, Capgemini identified that the three-year period for the design, build and implementation of the program was optimistic. It believed that delivery of the program over four years was more realistic, on the assumption that during that period there was no need to implement any major, new or changed Government policy.
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2.33 The ATO initially intended to complete the Change Program by June 2008 by introducing the new system in three scheduled releases:
Release 1 — intended completion was June 2005, but was fully implemented in April 2006. This release involved the installation of an ATO-wide client relationship management system, the upgrade of tax agent and business online portals and the installation of an improved correspondence system.
Release 2 — intended completion was September 2006, but was fully implemented in March 2007. This release involved the installation of a case and work management system (Siebel) and analytical models, as well as the improvement of the client relationship management systems and online portals.
Release 3 — intended completion was June 2008, but was implemented by July 2010, with warranty work expected to be finally completed by June 2011. This release involved the installation of a single ICP system for all of the taxation systems that the ATO administers, as well as the enhancement of other aspects of the ATO’s ICT. This release comprised the most substantial part of the Change Program and the bulk of the cost of the program — Work Order 9, which was executed on 13 December 2004.
Changes to the initial schedule
2.34 As work on the Change Program progressed a number of changes were made, especially to the scheduling of Release 3.
2.35 First, the Government’s new policy measures, such as the superannuation simplification measures, were added to the scope of the Change Program from early 2007. Amongst other things, this placed an emphasis on replacing the superannuation systems sooner than the ATO had previously planned. As previously stated, the ATO had initially excluded the replacement of the superannuation systems from the scope of the Change Program. At the time that the Government announced the new superannuation measures, the ATO was designing and building the Change Program ICP system. The ATO has advised that this new policy announcement required it to reallocate resources that were involved in the design and build of the ICP system, such as the chief designer for the Fringe Benefits Tax (FBT) and income tax release builds.
2.36 Second, the ATO decided in December 2007 to deploy Release 3 in several stages due to a number of problems, including difficulties in locking down design and substantial slippage of the schedule.
2.37 Finally, the ATO again rescheduled Release 3 to be deployed in smaller releases as follows:
Release 3.0 (deployed in January 2008) which enabled the ICP system and Siebel system to synchronise and data share, amongst other things
the FBT release (deployed on 1 April 2008) which was the ATO’s ‘proof of concept’ for the ICP system
the First Home Savers release (deployed in July 2009)
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the Super A and Super B releases (to be deployed in January and June 2009 respectively)
the income tax release (deployed in January 2010)
the Business Activity Statement (BAS) release (which was initially intended to be deployed in July 2010).
2.38 The ATO has since decided not to proceed with this BAS release6. The superannuation guarantee release was also excluded from the contract scope.
2.39 The changes to the scheduling outlined above, as well as the general delays in deploying the first two releases, extended the timeframes for the Change Program’s delivery by two years, with the BAS and Superannuation Guarantee releases excluded from the scope of the contract.
2.40 A diagram that compares the intended initial scheduling and the actual scheduling is reproduced in Appendix 5.
2.41 These changes to scheduling are discussed in more detail in Chapter 3.
KEY RELEASE ELEMENTS
2.42 Set out below are key elements from each Change Program release considered or referenced in this report.
6 In October 2009, the ATO noted that the previous plan to implement the BAS release was ‘not doable’ and developed a new plan to deploy the BAS release in 5 smaller releases. This plan meant that the ATO would continue to use legacy systems until late 2011. Since implementing the income tax release the ATO has decided not to proceed in implementing the BAS release under the Change Program banner. The ATO negotiated a credit from Accenture in relation to this sub-release.
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The Case and Work Management Systems (CWMS) release —Release 2 element
2.43 The Case and Work Management Systems (CWMS) replaced around 180 different ATO case and work management systems with a single ATO-wide CWMS. The ATO considered that this fundamentally changed the way that ATO staff carried out their work, including:
improving the planning, prediction and tracking of work more effectively
providing officers with a more complete understanding of taxpayers’ interactions with the ATO
improving online, phone and paper products and services.
2.44 Since its implementation, the CWMS has been subject to a number of ATO staff concerns and external review, including:
a Comcare review of the CWMS’ compliance with occupational health and safety requirements
an Australian National Audit Office (ANAO) performance audit to determine the level of success and benefits of the CWMS’ introduction.
2.45 Comcare started an investigation of the occupational health and safety risks relating to the ATO’s implementation of the CWMS (the Siebel system) on 28 October 2009. Comcare concluded that the ATO had failed to comply with the provisions of the Occupational Health and Safety Act 1991 in relation to the font size of that system. It intended to continue to work with the ATO to ensure that identified risks were addressed.
2.46 The ANAO audit report on the CWMS matter, Audit Report No. 6 2010–11 Performance Audit, The Tax Office's Implementation of the Client Contact — Work Management — Case Management System, was tabled in Parliament on 21 September 2010. The ANAO found that overall the implementation of the CWMS improved and transformed key aspects of ATO activity that supports tax administration. The implementation of the CWMS achieved six of the eight objectives of the Change Program’s original business case, with the two remaining objectives expected to be reached once the ICP system achieved full functionality. The report also noted, amongst other things, that:
… the Tax Office continues to explore scope for further gains to be made in the area of casework, reflecting the procedural differences between ‘high volume,’ as distinct from ‘complex’ casework.7
7 Australian National Audit Office, Audit Report No. 6 2010–11 Performance Audit, The Tax Office's Implementation of the Client Contact—Work Management—Case Management System, Canberra, 21 September 2010, p. 16.
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2.47 The ANAO made three recommendations directed towards achieving:
further productivity and efficiency gains from the Client Contact — Work Management — Case Management system
improvements in the consistency and efficiency of the administration of compliance risks
improved management of scheduled case cycle times.
The FBT release — Release 3 element
2.48 The FBT release was intended to be the ‘proof of concept’ release for the ICP system. The release affected around 70,000 taxpayers and was seen as a lower risk to deploy first than other releases.
2.49 The ANAO released an audit report, The Australian Taxation Office’s Implementation of the Change Program: a strategic overview, in October 2009.8 This audit provided a strategic review of the ATO’s progress on the implementation of the Change Program to that date. At the time of the completion of the ANAO’s review, the ATO had implemented the FBT release but not yet implemented the income tax release. The audit made recommendations aimed at improving governance, strategic management, the management framework and management of risks of the Change Program.
2.50 The FBT release is considered further in Chapter 3.
The Income Tax Release — Release 3 element
2.51 Broadly, the key aspect within the income tax release was the development of an ICP system that could receive, assess and issue various notifications of liabilities and payments. This required interaction with a number of other systems, including the systems of external agencies such as Centrelink and the Child Support Agency and other ATO internal systems, including the Higher Education Contributions Scheme and Superannuation.
2.52 The ICP system itself is made up of the following components which are visually represented in Appendix 6:
an inbound component which captures and validates the payments and forms sent to the ATO or input into the system by ATO officers
an ‘EAI integration layer’ component which transfers these payments and forms to the forms and processing module
a forms and processing component which performs a series of checks and, if successful, transfers the data to the accounting module
8 Australian National Audit Office, The Australian Taxation Office’s Implementation of the Change Program: a strategic overview, Canberra, October 2009.
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an accounting component which posts the transaction to the taxpayer’s account as a first step (Other aspects of the taxpayer’s account are also calculated in this module, including the running of credit risk assessments, offsetting amounts against amounts in other systems (internal and external to the ATO), triggering of refunds and correspondence and writing information to the tax return database.)
an outbound component which organises the printing of the relevant correspondence if a correspondence item or refund is triggered.
2.53 The income tax release is the main focus of this review. Chapter 3 outlines its history and various stakeholder responses. Initially, the events leading up to the income tax release’s deployment are outlined. Thereafter, attention is turned to the deployment itself and the community response to that deployment.
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CHAPTER 3 — ATO INCOME TAX RELEASE — EVENTS
LEADING UP TO DEPLOYMENT, DEPLOYMENT AND IMPACTS
ON TAXPAYERS AND TAX PRACTITIONERS
3.1 The income tax release is the most recent and substantial deployed under the Change Program banner. Events involved with the FBT release are also discussed in so far as they are relevant to the income tax release.
3.2 This chapter generally follows the main events in chronological order. The main exception relates to events occurring over the period February 2010 to June 2010. These events are grouped into three specific topic sections:
what taxpayers and tax practitioners experienced during the February–June 2010 period
a reconciliation of the main problems encountered by the ATO with its public communications
what the ATO experienced during the February–June 2010 period.
EVENTS LEADING UP TO THE INCOME TAX RELEASE’S DEPLOYMENT
The December 2007 rescheduling of Release 3
3.3 The income tax release was initially intended to be deployed in June 2008 as an element of the larger Release 3 package. However, as previously mentioned, Release 3 encountered problems, including substantial schedule slippage, difficulties in locking down design and expansion in scope by legislative change.
3.4 The ATO formally reviewed the Change Program schedule in December 2007. As a result, the ATO split the Release 3 package into a number of smaller releases:
Release 3.0 — which was deployed in January 2008
the FBT release — which was deployed in April 2008
the Lost Members Register release — intended to be delivered during August–October 2008
the Super A and Company Tax release (including the Superannuation Holding Account, Superannuation Co-contributions and Member Contributions Statements for Super and Company Tax) — intended to be delivered in January 2009
the Interpretative Advice and Assistance release — intended to be deployed around June 2009
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the First Home Savers Account release — intended to be deployed in June 2009
the Super B (including Superannuation Guarantee) release — intended to be deployed in June 2009
the Individual Income Tax release — intended to be deployed over an extended production testing phase from around April 2009 and deployed into production in December 2009 or January 2010
the Business Activity Statement release — intended to be delivered by June 2010.
3.5 The ATO’s plan in December 2007 was to release the ICP system’s income tax functionality in two releases: the company tax release and the individual income tax release (see above). However, in February 2008, the ATO concluded that the delivery of the ICP system’s income tax functionality would need to be rescheduled. Work continued towards delivering the required software while the rescheduled plan was being prepared.
The FBT release’s implementation and the independent assurers’ reports
3.6 While work was continuing on how the plan should be rescheduled, the ATO deployed the FBT release in April 2008. The FBT release was intended to be the ‘proof of concept’ for the ICP system. As expected, the FBT release encountered several significant problems, such as its deployment extending longer than originally planned.
3.7 By 4 June 2008, the ATO was considering rescheduling the other releases of the Release 3 package (outlined above). In particular it noted that:
• … it is not considered feasible to deliver all three functions (company income tax, individual income tax, remainder of superannuation) as recently proposed by Accenture for deployment in December 2008
• deferring the deployment of individual income tax increases our exposure to policy changes which will require solutions to be developed in both ICP and legacy systems
• under the original Release 3 deployment schedule ICP and legacy income tax systems were to be run in parallel for up to 6 months to build confidence in ICP and enable a simpler and lower risk cutover. This approach remains attractive.
[and]
• [there are] challenges and [the ATO] asked for a preferred release schedule be developed, in collaboration with business, and presented at the 18 June CPSC [the ATO’s Change Program Steering Committee]. The schedule should balance feasibility with the need to deliver functionality sooner rather than later and clearly identify high level business and client experience impacts and trade-offs.
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• [The ATO] asked the Independent Assurer [Capgemini to] provide an assessment of the preferred schedule.9
3.8 Following deployment of the FBT release in April 2008, the ATO engaged another independent assurer, Aquitaine Consulting (Aquitaine), to review ’what has happened in the Change Program to bring it to its current position with regards to delivering, or non-delivery of outcomes’ and to provide advice on the forward strategy on the proposed Release 3 rescheduling, amongst other things10.
3.9 Aquitaine made six key findings:
General — The Change Program [CP] team is currently at a low point of morale and energy, due to the length and intensity of the program to date, but more particularly due to the poor delivery to date. This must be addressed to allow the team to rebuild energy and enthusiasm for the task ahead.
Team Dynamics — the senior CP executive team have become somewhat dysfunctional and are consequently not leveraging their respective and combined strengths well. This is a strong team but also requires strong leadership to get the best from them.
Business Engagement — It is well acknowledged with the Program and major sub-plans that the business engagement between the CP and business lines has been poor. This has directly contributed to schedule and quality impacts due to a lack of meaningful involvement in determining the final systems design as well as to the testing and review of the final deliverables.
Program Management and PMO [Program Management Office] — the Accenture PMO has not been making use of quantitative reporting techniques and milestone tracking, but rather has emphasised the use of subjective and qualitative reporting. This makes it very difficult for the ATO to understand exactly where they stand at any point and to form an assessment of the risks to delivery.
The Role of the Independent Assurer [IA] — The IA role is considered critical to providing the ATO with high quality, objective and trusted advice, independent of Accenture and the CP itself. This is not occurring currently. … This notwithstanding, Capgemini has identified many significant issues that the ATO have not responded to. …
Quality Practices — Accenture has a high standard of quality processes that are documented for the CP, but these are not being followed in practice. These deficiencies are resulting in late and unexpected schedule blowouts due to high levels of defects emerging late in the process, and also in a poor standard of implementation into production use. The very high level of incidents over a number of weeks for Release 3.1 FBT places client experiences at risk. If this pattern is repeated for future releases, the ATO could suffer reputational impacts.
9 Australian Taxation Office, Minutes of the 4 June 2008 meeting of the Change Program Steering Committee, p. 3.
10 Aquitaine Consulting, Review of the Change Program at the June 2008 Replan, report to the Australian Taxation Office, Canberra, 15 July 2008, p. 3.
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Based on these findings, we consider that significant changes are required in the running of the Program to ensure a high confidence on delivery of future releases. These changes will require longer delivery times to increase the quality of testing, in particular. The current plans for the January 2009 release (company tax and the first Superannuation release ‘Super A’) have several months contingency that should be able to absorb these additional tasks, but this will require verification during detailed planning that is still to be completed by the respective project teams.11
3.10 Aquitaine also commented on the forward scheduling for future releases and observed that the schedule had a high degree of parallel activity. It commented:
The schedule at present for the Company Tax and Super A release in January 2009 has a very large degree of parallel activity … In addition, key testing activities such as UAT [User Acceptance Testing] are expected to be completed in parallel with other Product Testing activities, which is highly unrealistic.
Given the design close-off and build quality issues seen in 3.1, this plan appears unrealistically optimistic. In addition the consequences for the ATO of a poor quality result for the company tax release, including potentially delayed refunds from large corporations, would especially be serious for the reputation of the ATO.
A more quality-controlled approach with clear quality checkpoints is therefore recommended … In particular, as a minimum, checkpoints are recommended at [End of Design; End of integrated product test and partnership testing — start of user acceptance testing; End of performance testing; End of user acceptance testing/start of pilot; end of pilot, start of production].12
3.11 Aquitaine made 16 recommendations, which included:
Quality Practices …
4. The introduction of a formal user acceptance testing phase with clear entry and exit criteria and emphasising the exercise of end-to-end business scenarios. It is expected that a well tested system at the end of UAT will have no serious defects, allowing the pilot phase to focus on resolving issues of process and procedure, documentation and education.13
3.12 The ATO has advised that it has a framework for tracking its implementation of all agreed IA recommendations. The IGT has not independently assessed the ATO’s implementation of these recommendations. However, the ANAO has publicly reported in its strategic review of the Change Program (up to and including the deployment of the FBT release) that the ATO had acted on the IAs’ recommendations:
The Tax Office has since acted on the recommendations of several specially commissioned reviews examining the implementation phases to date, resulting in
11 ibid., p. 1. 12 ibid., p. 10. 13 ibid., p. 13.
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improved business practices, work schedules and accountability arrangements, thereby strengthening overall governance.14
3.13 Capgemini also conducted a post-implementation review of the FBT release to identify the factors in the build and test phases that led to the overall instability of the release. In July 2008, it alerted the ATO to its preliminary findings:
The Change Program [CP] made a conscious decision to proceed with the FBT release, given the challenges that the release faced. As a result, the quality of the overall solution was impacted.
Based on our preliminary findings, we have identified two key factors that contributed to the perception of quality issues with the FBT release:
1. Issues in Design, Build and Test:
a. Test stage gates were not enforced.
b. There was insufficient test coverage during the technical delivery to support the implementation of a new technology platform.
c. The Testing environment did not functionally replicate the production environment to enable end to end testing (for example, Outbound architecture).
d. Testing was not accurately supported by converted test data.
e. Inconsistency in understanding the different objectives and roles of each phase of testing within the Release.
2. The different interpretation of the definition of Defects Severity and the multiple, disparate reporting of the defects.
a. The execution of the go-live support run by the Change Program Support Team (CPST) was not consistent with BESS standard of practices, as a result, a number of business issues were lost, leading to reduced confidence by the business. Consequently, there is no acknowledged single source of reporting that provides a consistent picture of the actual status in production.
b. Severity 1 and Severity 2 criteria were defined, but were subjected to different interpretation by the Business and IT. Consequently there are different views on the quality of FBT from Business and CP perspective. This lead to a difficulty for the CP to understand and prioritise ‘true’ Severity 1 issues that occurred in production.15
14 Australian National Audit Office, The Australian Taxation Office’s Implementation of the Change Program: a strategic overview, Canberra, October 2009, p. 22.
15 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.2, Period covering 1st July 2008 – 31st July 2008, report to the Australian Taxation Office, Canberra, July 2008, pp. 10-11.
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3.14 In its final report, Capgemini found the following causes:
• Governance & Leadership — lack of quality enforcement; basic test reporting; schedule pressures; continuous scope creep
• Engagement & Collaboration — disconnect between Business and Change Program regarding issues in production; lack of common understanding of role and responsibilities in Test
• Skills & Capabilities — inconsistent use of processes & tools; insufficient build and test knowledge and experience
• Planning — drops too frequent in Test; underestimation in build and test activities; converted data not able to support test;
• Complexity — complexity of the architecture; complexity of the releases; business complexity.16
3.15 Capgemini made 16 recommendations (which are set out in Appendix 14) for improvements that it considered should be applied to all future releases.
3.16 Capgemini also expressed concern with the scheduling of the future releases. It commented that lessons from the prior releases had not been learnt in relation to, amongst other things, estimating and forecasting the resources and time needed to complete the releases, the scheduling contingencies and what should trigger a contingency. In particular, it stated:
Principles for Delivery
In the agreed and endorsed Delivery Methods and Plans, the delivery approach contains many valuable elements. Historically, the IA [Capgemini] has observed deviations from the delivery principles in the actual execution, and would like to see specific measures in place that ensure best practices and the delivery approach are rigorously followed. This will ensure that the solution delivered will be aligned to the documented Quality Plans.
Findings:
29. In previous reports, the IA has reported that build activity eroded into testing, and that the production environment was used as testing bed. There have been many defects emerging after technical deployment into production because of insufficient testing and the lack of a real Level 4 environment that mirrors the exact environment in production, as seen since Release 3.1a FBT has gone live. The IA expects the Change Program to adhere to rigorous quality standards with regard to IPT, Partnership Testing, UAT [User Acceptance Testing] and Business Pilot, including the use of a true Level 4 environment that enables proper test of the system before it goes into production. This will help prevent the majority of defects from emerging in production.
16 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.2, Period covering 1st August 2008 – 31st August 2008, report to the Australian Taxation Office, Canberra, August 2008, pp. 4-6.
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30. In the previous releases, the IA observed that there has been multiple occurrences of late design change requests leading to the slippage of design schedule. This then has a cascading effect on the downstream activities affecting the overall delivery schedule. It is common and inevitable that requirements constantly change and the business knowledge is ever-evolving. The IA expects that the Change Program adheres to the design stage schedules that are agreed and endorsed in the plan, and most of all, that the CP implements the new Design Approach. … 17
3.17 The ANAO also reviewed the ATO’s implementation of the Change Program up to the point of the ATO’s implementation of the FBT release. Amongst other things, the ANAO commented that:
35. The Tax Office initially established appropriate governance arrangements for the management of the Change Program that were commensurate with the project’s anticipated size and complexity as understood in 2004. The Tax Office has since acted on the recommendations of several specially commissioned reviews examining the implementation phases to date, resulting in improved business practices, work schedules and accountability arrangements, and thereby strengthening overall governance. …
The task ahead
48. Notwithstanding the experience to date, the scale and complexity of the tasks yet to be completed means that the Tax Office still faces significant challenges in finalising the project to a satisfactory standard required for the systems which automate most of Australia’s tax administration. There is a significant risk that the deadlines for the completion of further releases may be put under pressure or that functionality in the original scope of the Change Program will be reduced so as to meet current budget and timetable expectations.
49. The experience of the Release 3 FBT implementation has highlighted the importance of end-to-end testing, business pilot with actual production data and full involvement of Tax Office business lines. In addition, there was a need to validate the compliance of the new systems against agreed standards and requirements, including legislative requirements. This will be particularly important for the income tax phase of Release 3 which delivers systems that will automatically finalise tax liabilities and credits for almost all of Australia’s approximately 14.5 million tax returns. …
50. The Tax Office’s experiences to date underlines the importance during the remainder of the Change Program of:
• Closer monitoring of significant risks and correspondence mitigation strategies, and setting higher, more verifiable standards for ‘fitness for purpose’ over the quality of work completed by the contractor;
• Following sound project management practices during the design, development and assurance stages for future ICP releases; and
17 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.1, Period covering 1st June 2008 – 30th June 2008, report to the Australian Taxation Office, Canberra, June 2008, pp. 16-17.
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• Requiring that prior to the release of ICP software into production, end-to-end testing, business pilot with actual production data and assurance processes are completed with the full involvement of Tax Office business areas (as defined in the [ANAO report’s] Glossary “end-to-end testing” requires assessment of systems on a fully integrated basis.)18
3.18 The ANAO made four recommendations:
Recommendation No 1
The ANAO recommends that, in order to better manage risks to the Change Program, the Tax Office more effectively utilise its available assurance framework (compliance assurance, internal audit, the contracted independent assurer), including end-to-end system testing involving operational areas, during the remaining implementation phases of the Change Program.
Recommendation No 2
The ANAO recommends that in order to improve the governance of the Change Program, the Tax Office amend the contract (schedule 2) to clearly set out the high level governance arrangements.
Recommendation 3
The ANAO recommends that in order to continually improve the performance of those functions transformed by the Change Program releases, the Tax Office review existing tax Office management frameworks to take into account the enhanced performance measurement and reporting capabilities of the new system so as to:
a) improve the Tax Office’s capacity to evaluate the efficiency, productivity and effectiveness of performance on a whole of Tax Office basis; and
b) evaluate the scope to improve performance by the use of methodologies that measure and compare performances at an organisational group level.
Recommendation 4
The ANAO recommends that in order to improve the strategic management of the Change Program, and having regard to existing management reports, the Change Program Steering Committee periodically receive additional summary, high level reports covering:
a) the broad range of costs and benefits attributable to the Change Program; and
b) the progress of the Change Program in achieving the strategic goals originally determined.19
18 Australian National Audit Office, Audit Report No. 8 2009–10 Performance Audit, The Australian Taxation Office's Implementation of the Change Program: a strategic overview, Canberra, 29 October 2009, pp. 22, 24-5.
19 ibid., p. 40.
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3.19 The background for Recommendation 2, as outlined in the ANAO’s report, was that Schedule 2 of the contract provided that governance arrangements were to be set out in the Program Management Charter, the Easier, Cheaper, More Personalised (ECMP) Change Program Phase 3 Change Program Charter. However, the ANAO found that the status of the charter was ambiguous, adding to the difficulty in determining the ATO and Accenture’s roles under the contract. The ANAO stated that:
2.59 The ambiguity of the status of the Charter, in the context of the purchaser/provider contractual relationship between the Tax Office and Accenture, adds to the complexity of the governance arrangements. In order to clarify the intent of the Charter, as a reference document to assist with administrative and procedural matters, there would be benefit in negotiating an amendment to the contract. This could involve inserting in Schedule 2 of the contract a short description of the governance arrangements instead of the reference to the Charter.20
3.20 The current version of Schedule 2 of the contract is reproduced in Appendix 4.
Forward schedule revisions
3.21 In early August 2008, the ATO reconsidered the scheduling of the company tax release:
At the CPSC we confirmed that the issue as to when to schedule [the] Company Tax [release] was in the clear context that [the] first priority is to be [the] completion of [the] FBT [release] and the delivery of [the] LMR [Lost Members’ Register release], and then Super (a) … in January 09 …
A draft plan to deliver by January [2010] was prepared and the teams have been working towards this plan whilst the overall R3 [Release 3] replan is completed. However it is not possible to adjust this plan to incorporate the approach to UAT [User Acceptance Testing] and parallel processing that is now considered necessary (see for example the [Aquitaine] report) for confidence in product quality for deployment to business.
Given our inability to guarantee a "pilot" on the current timelines, we have looked at a revised schedule which meets 4 primary objectives:-
1. Minimise risk to the Super functionality
2. Maintain focus and energy on Companies, but be able to divert resources if necessary to Super
3. Maintain a sensible schedule for design and build of the July 09 release — FHSA [First Home Savers’ Account], SG [Superannuation Guarantee] etc., and
4. Provide an extended parallel run/business pilot for both Company and Individuals Income Tax
20 ibid., p. 90.
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As there is no current significant resource contention with Super (a) we believe we should continue to work to the current design, build, test plan for Company Tax so that we have a strong technical platform into which to subsequently merge the IITR [Individual Income Tax Release] products; and then be well prepared to carry out parallel processing from July 09 and subsequent business deployment for both products together — still targeting for this business deployment to be no later than January 10.
It is noted that if we now decide to split Company Tax business deployment from Super (a) there is some additional interface work necessary to connect Super (a) to legacy systems given that Company Tax would not be in ICP. However this can be incorporated into the plan without significant risk. This work is to split MCS [Member Contributions Statement] data from SMSF [Self-Managed Superannuation Funds] returns and reflects what we are doing this year with the combined SMSF/MCS statements. This work is expected to be more than offset by not having to "split" NTS [the National Taxpayer System — a pre-existing legacy system] between individuals and companies.
Because all or most of the Company Tax design, build, test work would continue to the current plan, and in fact there would also be some avoided effort[,] it is not expected that there would be material overall changes to cost or resource requirements. However this is being confirmed by an impact assessment (presently being completed) which will provide a final assessment on changes to effort or costs either for the ATO or Accenture. There would be some deferral of benefits from the later business deployment of Company Tax (estimated at $2m pa based on the Business Case assumptions)
We will confirm the above approach as part of the final R3 Replan approval (including Capgemini input) but seek any further guidance from the ATO Exec now as the detailed replan would need to take this into account.21
3.22 At the ATO’s CPSC’s 28 August 2008 meeting, a revised schedule for future releases (Release 3 Replan) was endorsed as a baseline against which the future delivery would be managed.
Company tax release deferred and combined with later individual income tax release
3.23 This revised schedule (Release 3 Replan), amongst other things, combined the company tax release and individual income tax release into one release. Product testing was to be completed by mid-May 2009, followed by the ‘synch’ with the TaxTime 2009 code and regression testing with a 6 month Parallel Run and Business Pilot and deployment scheduled for 4 January 2010.22
21 Australian Taxation Office, Attachment to the minutes of the 30 July 2008 meeting of the Change Program Steering Committee, internal correspondence, p. 2.
22 Australian Taxation Office, 3.1.2(a) Summary Replan Pack for CPSC, document presented at the 28 August 2008 meeting of the Change Program Steering Committee, pp. 6-7.
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3.24 The reasons given for the replan were:
• The FHSA product is legislative and must be delivered in July 2009. It is based on CoCons functionality being delivered in January 2009. Thus the priority of management focus and energy must be on delivering SuperA in January 2009.
• Removing Company IT [income tax] from this release takes away the October code-merge necessary in the previous scenario. This effectively provides an extra 8 week buffer for the SuperA release.
• Operations have expressed a desire to have a "pilot" before the deployment of Company Tax functionality. The previous Replan has no capacity between now and end of 2008 to meet that requirement.
• The previous Replan requires technical alterations to NTS to “split” Company Tax processing (which will be in ICP) from IITR processing (which will remain in NTS for 12 months). This is technically complex and adds risk. Avoiding this set of work activities avoids additional delivery risk.
However, we believe we should continue to work to the current design, build, test plan for Company Tax so that we have a strong technical platform into which to subsequently merge the IITR products; and then be well prepared to carry out parallel processing from July 2009 and subsequent business deployment for both products together — still targeting for this business deployment to be no later than January 2010.23
3.25 The ATO also scheduled four dates, called ‘Stage Gates’, (1 December 2008, 31 March 2009, 30 September 2009 and 1 March 2010) on which it would formally review progress, including assessments of whether the planned timeframes for the smaller releases could be met. TaxTime 2009 was also to be delivered in its current ICT systems (that is, pre-ICP systems or legacy systems) in July 2009.
3.26 However, by October 2008, the design for the company tax and the individual income tax releases had fallen behind the revised schedule by about four weeks. The ATO further revised its schedule to accommodate the delays. Capgemini recommended that the ATO identify and resolve the root causes for the continuous slippage.
3.27 In its October 2008 report, Capgemini observed that:
The Current Status of the Program: …
• In Income Tax, the Change Program has verbally specified that the signoff of Individual Tax design by the 24th December 2008 is critical to achieve the January 2010 technical deployment date. The IA [Capgemini ] endorses this view and has concerns that this date will not be achieved as:
o Tranche 4 design for Individual Tax has not been completed as per the planned completion date, with 58 outstanding Change Requests as at the 3rd November.
23 Australian Taxation Office, Summary Replan Pack for CPSC, document presented at the 28 August 2008 meeting of the Change Program Steering Committee, p. 6.
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o Due to the high dependency of design resources between Tranche 4 and Tranche 5 of Individual Tax, this will have a negative impact on the ability to achieve the 24th December design milestone.
As there is no contingency remaining for Income Tax, missing the 24th December 2008 deadline will cause further pressure on the Change Program to reduce the time originally allocated for the Parallel Run. With the Christmas break, the IA is concerned that this design will not be fully endorsed until the end January 2009.24
3.28 In its November 2008 report, Capgemini found that:
The effort required to design and deliver CRs [Change Requests] is frequently underestimated.
Unanticipated CRs are being approved with limited consideration of the overall impact of the schedule.
71% of the critical resources in the CP [Change Program] are within design creating consequential delays / impacts
Planning has not adapted for a parallel release paradigm, causing compounding impacts.25
3.29 Capgemini recommended that:
Assess CRs to ensure that they can be delivered in the current schedule, with consideration of resource availability, schedule, skills, etc. Reconsider the plan when it cannot be delivered.
Identify, plan and build critical resources into the design schedule and align to program level management of critical resources.
Accenture to inject a design project manager to assist Integrated Design planning and management.26
Income tax release key testing schedule milestones
3.30 The schedule to deploy the income tax release involved key milestones that included certain types of testing. The schedule for testing included, amongst others, the following:
Product testing — gave an assessment of the quality of the software and whether it was working according to design. At the time of the ATO’s August 2008
24 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.0, Period covering 11th October 2008 – 9th November 2008, report to the Australian Taxation Office, Canberra, October 2008, pp. 2-3.
25 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.0 Period, covering 10th November 2008 – 5th December 2008, report to the Australian Taxation Office, Canberra, November 2008, p. 8.
26 ibid., p. 8.
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rescheduling of Release 3, the product testing was initially intended to be completed by the end of May 2009. This was later rescheduled to June 2009 (but was finalised on 15 January 2010 — the same day that the code was started to be packaged and made ready for the production deployment.27
Parallel Run — , at the time of the ATO’s August 2008 rescheduling of Release 3, was intended to be conducted over the period late June to the end of October 2009, but was conducted in two cycles over the period mid-September to late December 2009 in parallel with the product testing. Under the parallel run, the transactions and results delivered by the ICP system’s use of real production data were compared with that of the ATO’s pre-existing legacy systems to ensure that transactions and results were the same. The ATO has advised that after it compiled all the data conditions for two of the cycles, it considered that any further cycles would not materially add to the benefits of the parallel run. However, a number of ATO functions were not included in the parallel run because the ATO could not faithfully reflect the interactions between different legacy systems due to their structural differences.
Business Pilot (or pre-deployment pilot) — , at the time of the ATO’s August 2008 rescheduling of Release 3, was intended to be undertaken for six weeks from the end of the parallel run, but was conducted in two 4-week cycles over the period October to mid-December 2009 in parallel with the product testing and the parallel run. The business pilot evaluated the readiness of the ICP system design, procedures and infrastructure and allowed the ATO to evaluate true business readiness by testing the design of manual workarounds, business processes and inter-linkages with external parties and other Commonwealth departments. It was intended to enable the ATO to measure business confidence in the end-to-end process incorporating ’an entire client experience’ of both internal and external clients for the income tax release. This included:
• The ability to evaluate business confidence for business processes in a true end to end capacity incorporating an entire internal and external client experience
inbound --> forms processing --> accounting --> outbound
• Replicate (as much as possible) the complete income tax environment focussed on the internal and external client experience
• Expose a large group of business users to complete business processes in the new environment who in turn provide support, experience and expertise back in the workplace
• To measure and evaluate the business tools, processes and procedures to support staff transition
27 Capgemini, letter to the Australian Taxation Office, 21 January 2010, p. 3.
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• Review interactions between supporting interfaces and legacy systems.28
3.31 Due to the design of the system, the parallel run and the business pilot were not intended to test the code but to test that the configuration of business requirements was correct.
3.32 The reason for the original intention to complete the product testing before the parallel run and business pilot testing began was that this scheduling would minimise business risks by running the system on a stable code base to expose any defects, ineffective business processes or any other matters that may disrupt intended business outcomes:
The Income Tax Release plan endorsed by the CPSC in their meeting on 28 August 2008, approved combining Company Tax and Income Tax functionality into a single Release with the Product Testing to be completed by the end of May 2009, with User Acceptance Testing (UAT) occurring from May to June 2009. UAT would be followed by the ATO undertaking a six month business assurance stage that enabled all levels of business to assess the impact of the new system on the ATO business practices and workforce and put in place actions to manage any change where required. This assurance was to be undertaken on a stable codebase that was exercised via Parallel Run and Business Pilot activities.29
Income Tax release’s June 2009 product testing deadline was repeatedly deferred
3.33 Capgemini and Aquitaine continually reported to the ATO on the progress towards deployment readiness.
3.34 As noted above, the deadline for product testing was rescheduled to June 2009. However, from December 2008 to April 2009, Capgemini alerted the ATO that the June 2009 deadline would not be met. For example, in its February 2009 report, it found that:
Income Tax: The IA [Capgemini] continues to consider that the Income Tax delivery is at a high level of risk to meet its planned timeframes as there is no further schedule contingency remaining. This Release has been tracking to schedule, however, the level of unresolved Change Requests allocated to this Release and the below-plan progress of testing could impact on the start date for Parallel Processing.
Progress has been made on finalising the Parallel Process approach. However there is a misalignment between the Business and the Change Program in terms of the intent, purpose and coverage of the Parallel Processing. Further complicating the situation is that agreement between the Change Program (ATO and Accenture) and EAM in terms of
28 Australian Taxation Office and Accenture, ECMP Change Program Release 3 – Income Tax Parallel Process and Business Pilot Plan, 17 June 2009, p. 14.
29 Capgemini, letter to the Australian Taxation Office, 21 January 2010, p. 2.
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roles and responsibilities for the support and management of the Parallel Approach are unresolved. Both of these issues need to be resolved as soon as possible.30
3.35 Although good progress was being made on other Change Program releases, such as Super A, by June 2009, Accenture advised that they:
[were] not seeing progress through product testing for Income Tax. Lots of team changes have been made but not making breakthrough. Pouring extra resources into address — need to see results quickly.
The [ATO] noted concern with the slippage of the date for the delivery of Income Tax into product test and sought clarification of where the extra resources mentioned by [Accenture], would come from. [Accenture] advised that [it would] work through the Income Tax situation and that the resources would be a mix of people freed up after the [Super B, First Home Savers Account and Interpretative Assistance] Release and some externals. The [ATO] sought confirmation that they wouldn’t be taken from BAS work. [Accenture] advised that they wouldn’t at this stage. …
[Aquitaine] commented that for Income Tax, the re-plan was looking positive for Tax Time 2009 and asked if this was still the case. [Accenture] responded that the number one issue is the need to execute the code which is in place. [It] also noted that the blockers are different than those experienced with FBT. [The ATO] asked when the Tax Time 09 code base would be delivered into the integrated environment as there is a dependency on Tax Time 10 from the 09 code base. [Accenture] advised that the code was ready to go in but timing was an issue. [Capgemini] noted that this was a watch item for the Committee. The acting Chair asked [Accenture] to [advise] what the new expected delivery date for Income Tax was. [Accenture] advised that he would be in a position to provide this information by 3 July. The [ATO] asked that Capgemini and Aquitaine have a look at what is finally proposed to provide the Committee with some assurance. [It] asked that the assessment also cover consequences on other activities i.e BAS, Super B and FHS[A]. [Accenture] reiterated that the Income Tax issues were program management issues which needed to be resolved by Accenture and that additional resources from the Tax Office were not being requested.31
3.36 The successful completion of the product testing required, amongst other things, over 1300 test steps to pass. Capgemini measured, to a large extent, progress on this requirement by assessing the ‘Rate of Test Steps Passed’.
3.37 Capgemini predicted the likely completion date for the product testing largely on the basis of the current rate of test steps passed. From April 2009, Capgemini progressively shifted the estimated completion for the product testing from October 2009 to January 2010.
3.38 ATO officers and Accenture explained to the IGT in meetings that there were better metrics to use in order to predict the completion date for the product testing. The
30 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.0, Period covering 7th February 2009 – 27th February 2009, report to the Australian Taxation Office, Canberra, February 2009, pp. 3-4.
31 Australian Taxation Office, Minutes of the 24 June 2009 meeting of the Change Program Steering Committee, pp. 2-3.
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rate of test steps passed did not accurately reflect the amount of work needed to be done in order to successfully resolve product testing. The reason is that a test step may not be passed because it contains a number of errors. If the number of errors is small, then less work is required to fix it than if there are large numbers of errors and therefore much more time would be needed to resolve them. Therefore, it was expected that there would be a low rate of test steps passed until the end of product testing was within reach. They explained that, as an alternative, the error rate was a better metric.
3.39 The following diagram visually represents this concept. It does not depict the actual rate of errors or test steps passed.
Elapsed testing period
Num
ber
Number of errors resolved v. number of test steps passed over time
Number of test steps passedNumber o
f erro
rs reso
lved
3.40 Notwithstanding this difference of opinion, Capgemini was ultimately more accurate in predicting the actual date for product test completion (which was mid-January 2010).
3.41 The ATO advises that the slippage in completing the product testing was due to a combination of reasons, with the three having the most impact being:
unavailability of environments for extended periods at critical times — for example, a couple of power outages at the ATO’s central data centre rendered testing environments unavailable for around a month while staff focused on restoring the environments for production.
new legislation implementation action32 — significant work was required to effect new Government policy initiatives in time for TaxTime 2009 taxpayer processing. The resourcing demands imposed by these changes impacted on the building and testing phases of the program.
32 The major legislative initiatives introduced at this time were the Education Tax Refund; the Family Tax Benefit Streamlining Administration; the Higher Education Scheme-Higher Education Loan Program Benefits and the Family Tax Benefit Non Lodger initiatives.
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the difficulty and level of complexity involved in maintaining pre-existing legacy systems and the ICP system in parallel (including the underestimation of the complexity of ‘niche’ scenarios) — it required more work than planned.33
3.42 There are also a number of other contributing factors, which are set out at the end of Appendix 7.
3.43 A comparison of the planned testing schedule and the actual testing conducted, together with an explanation of the testing, is also set out in Appendix 7.
Business testing now to operate in parallel with product testing
3.44 The delays in completing the product testing meant that the parallel run and business pilot (business testing) were rescheduled to occur at the same time as the product testing. This meant that the business testing was undertaken on a code base that was several versions earlier than the final code base, giving limited outcomes for the parallel run and business pilot.34 The start date for the business testing was deferred on a number of occasions, with the consequence being that the number of business scenarios and test cases were reduced.
3.45 The ATO identified those functions which were critical to the income tax release’s initial deployment and those which could wait to be deployed at a later time. For example, the ATO decided to deploy the Debt Operational Analytics (OA) at a later point in time after January 2010. This delay was estimated to reduce ATO receivables by $310 million for the 2009-2010 year, however, this amount was expected to be materially recovered in future years.35 For the functions that would not be deployed or fixed before the deployment date, the ATO developed manual workarounds.
3.46 However, the business testing that was conducted did provide benefits. It disclosed further errors with the system, the resolution of which created more test scripts that needed further product testing.
3.47 The parallel run also gave the ATO data with which to estimate the potential future workload in production in relation to suspension rates and to roster the staffing accordingly.
Income tax release deployment date now deferred to late January 2010
3.48 In September 2009, the ATO considered that current progress indicated that a 4 January 2010 deployment date for the individual income tax release was
33 An example, is the configuring of the specifications for the imputation offset—it is refundable for all but one type of entity.
34 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.0 – FINAL Period covering 23 December 2009 – 14 January 2010, report to the Australian Taxation Office, Canberra, January 2010, p. 3.
35 Note that Aquitaine Consulting later reported to the ATO that the ATO’s Debt area estimated these reductions to be around $570 million, and the Tax Pratitioner and Lodgement Strategy area estimated that lodgement compliance revenues would be reduced by around $80 million: Aquitaine Consulting, letter to the Australian Taxation Office, 21 January 2010, p. 2.
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unachievable. It decided to aim for (but not commit to) a rescheduled deployment on the Australia Day long weekend — 1 February 2010.
3.49 However, Capgemini advised that the 1 February 2010 deployment date was also at severe risk of not being met. This was because the rescheduled mid-November completion date for product testing would be delayed until mid-December unless test script pass rates for product testing were elevated to 145 from what was 107 at that time. Capgemini also expressed uncertainty around the testing throughput. The ATO noted that there was a severe risk associated with the January deployment, but would work hard towards meeting that date. However, the ’plan will not proceed if not ready’.36
3.50 The ATO also identified Easter 2010 or the end of 2010 as possible alternative deployment dates. If the Easter date was chosen then the ATO would ‘need to maintain legacy build (that is, any software changes that were needed to implement any amendments to the tax laws for the ICP system had to also be made to the pre-existing legacy systems) for some time’ as there ’would be parallel testing for legacy and Tax Time 10 if there is an Easter deployment’. However, the ATO would assess the progress towards an Australia Day 2010 implementation date at a series of checkpoints and could delay making the decision to go live until mid-January.37
Decision criteria for income tax release deployment
3.51 In early November 2009, the ATO decided to use four criteria to assist it in determining the readiness for deployment of the income tax release:
production readiness — the system’s ability to perform 14 key business scenarios, such as processing of credit and debit assessments, transfer of data to and from external agencies and processing of amendments
staff readiness — the ATO’s ability to use the new system, adapt to new processes and cope with the expected levels of manual workarounds
systems implementation readiness — the new system, its stability, scalability, performance, conversion of data held in its pre-existing ICT systems (legacy systems) and the arrangements to support the new system once it was implemented
community readiness — the ATO’s engagement with external stakeholders such as tax professionals, other government agencies and service providers.
36 Australian Taxation Office, Minutes of the 15 September 2009 meeting of the Change Program Steering Committee, p. 5.
37 ibid.
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3.52 A key factor in this framework was the classification of the identified defects (important in determining systems implementation readiness):
• Severity 1 — Critical / Mandatory
- The application/system is not able to run in a production environment. There is no workaround for the problem to allow Users to continue processing with minimal or no loss of efficiency or functionality or legal requirements to be conformed with.
- Sample Indicators: major impact on revenue; major component/application not available for use; impacts on the availability of an external facing system
• Severity 2 — High / Essential
- The incident restricts the usability of the application/system, but the application/system itself is running. There is no sustainable workaround available.
- Sample Indicators: moderate to large number of clients and/or customers affected; slow response times; component continues to fail — intermittently down for short periods, but repetitive
• Severity 3 — Moderate / Required
- The application/system is up and running, but there is a moderate impact on the usability of the application. There is a workaround available.
- Sample Indicators: low customer/client impact; limited use of product or component; there is a workaround available
• Severity 4 — Low / Desirable
- The application/system is running with a minor flaw. There is a workaround for the problem and the usability of the application is not affected.
- Sample Indicators: low38
3.53 The ATO decided that the existence of any Severity 1 defect would preclude deployment.
3.54 Another key factor was the system’s performance in relation to the following 14 key scenarios that represent key ATO business functionalities (important in determining production readiness):
Return processing — Credit assessment
Return processing — Debit assessment
Manage lodgement obligations
Payment processing
Manage accounts in debit
38 CPT Global, Release 3 – Income Tax Implementation Review, report to the Australian Taxation Office, August 2010, Appendix E.
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Data and transactions exchanged with the Reserve Bank of Australia, Centrelink, Department of Education and Workplace Relations and the Child Support Agency
Create and review suspense and review items
Process amendments
General ledger update and reconciliation
Client accounts — update and maintain
Manual generic form processing
High risk refunds and IDC processing
Datamarts and Reporting cubes.
3.55 In relation to the community readiness criteria, the ATO had planned a communication and intelligence collection strategy. This strategy included providing information to taxpayers, businesses and tax practitioners on the Change Program, particularly in relation to the income tax release.
3.56 At various stages through the 2009 calendar year, progress reports on the Change Program were given to the range of established ATO business, tax professional and tax agent consultative forums. The ATO also had a range of material on their website (ato.gov.au) detailing the background and impacts of the Change Program.
3.57 The tax professional associations and tax practitioners were consulted about the best time to deploy the new core processing system. Following these consultations it was decided that the December/January period was the best option. It was believed that the primary income tax returns that would be impacted would be those lodged by tax practitioners on behalf of their clients. This was because the ‘due date’ for self-preparers is 31 October in accordance with the legislative instrument which is tabled with the Parliament by the Commissioner of Taxation. This due date does not alter from year to year. It was also known that historically approximately 5 per cent of income tax lodgments are lodged during the December–January period.
3.58 As the timing for deployment of the income tax release moved closer, the communication strategy was aimed to raise awareness of the intended deployment date. In particular, from September 2009, the ATO alerted tax practitioners to the potential impacts that this deployment may have on lodgements that may result in delays in processing of tax returns until March 2010. The ATO urged tax practitioners to lodge as early as possible, and before the end of December 2009, to increase the likelihood of their refund issuing prior to the proposed shutdown. This ATO advice was aimed at allowing tax agents to provide advance notice to their clients and to take any necessary steps to reduce the identified impact.
3.59 By December 2010, it was agreed with members of the ATO Tax Practitioners Forum (ATPF) to establish a Change Program Consultative Group (CPCG). This group was intended to have regular teleconferences from February until 2 March 2010. It was
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established by the ATO to hear directly from tax practitioners and their representative bodies and associations.
3.60 The ATO also made telephone calls to around 3800 tax practitioners who normally lodged more than 100 income tax returns during December and January to alert them to potential delays that may arise as a result of the deployment.
3.61 From October 2009 through to mid-January 2010, both Capgemini and Aquitaine assessed the work to date against those criteria and reported identified gaps to the ATO.
ATO 22 December 2009 assessment — much more work to be done by end of January to minimise risks
3.62 On 22 December 2009, the ATO’s CPSC met. It was presented with a high level ATO assessment of the readiness to deploy the income tax release. Due to the significance of this assessment, we have reproduced substantial extracts from it:
1. Overall we would consider deploying Release 3 Income Tax at the end of January 2010 to be ‘High Risk’ based on the analysis undertaken to date on outstanding defects. However we note that it has been difficult to make an informed assessment of what errors will be outstanding at the time of deployment and the business impacts associated with these errors.
2. The key reasons underpinning this assessment include:
• Delays in product test and multiple parallel activities have made it difficult to make an informed assessment of impacts on our business, current estimates for product testing completion are early to mid January 2010
• It has been difficult to assess the status of errors fixed in the production code and the likely number of unknown errors that could manifest themselves after deployment
• Potential reputational risks with loss of confidence in the ATO’s ability to calculate assessments and process work within acceptable standards. This will be compounded where additional work is required to be undertaken by tax agents e.g. identification or checking of incorrect assessments and then follow up work to organise the amendments/changes
• Impacts on delivering tax time 2010 (for example, availability of key resources and timeframes for testing)
3. Deployment of a system of this magnitude has impacts on both our service standards and actioning work that has been stockpiled during the ‘ramp down’ and ‘ramp up’ period. We anticipate that this will require an additional 655 to 856 resources [full-time equivalent staff] during February to June 2010.
4. Depending on the nature and size of the issues on hand at deployment — we anticipate that we could manage workarounds that involve up to around 1300 additional resources … (this excludes any budgetary considerations and is additional to the ramp up of resources as per para 3 above). However if workarounds were of a greater order of
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magnitude then the associated operational stress would likely make these mitigation strategies unworkable.
5. Whilst we consider that we could manage the additional work from the workarounds … there would be still a substantial impact on our business outcomes. For instance under these circumstances we estimate that between January and June 2010 most returns would not be processed in less than 50 days and this situation is likely to continue into the second half of the calendar year. Industry benchmarks and experience from previous deployment(s) shows that fixing errors and design issues in production can cost up to 4-5 times more than fixing these errors in a testing environment. …
The following key points are put forward for consideration:
1. Business Impacts
A deployment of this magnitude has significant impacts to the Tax Office’s business (assuming the system is fully functional). These impacts have been appropriately factored into our planning. For example:
• Ramp down approach leading up to deployment has been finalised: As a result of ramp down we anticipate:
- Key service Standards will not be met for a number of months following deployment …
- Significant but manageable impacts on lodgements, refunds, offsetting credit and debit interest
- Workload impacts such as stockpiling of work, back out of activities from NTS and associated workforce planning decisions leading up to deployment (these have been finalised)
- Debt collections will be reduced by $310 million in 2009-10 — of this around two thirds should be clawed back in 2010–11.
• Outstanding concerns remain however, about the large number of outstanding defects and ‘system unknowns’ which have been evident in the previous releases.
- The last Release 3 Income tax status report shows that there are in excess of 800 outstanding defects, 600 of which are Severity 1 or 2 in nature. ….
- Approximately 300-400 errors (predominantly SEV 1) are expected to be fixed between now and mid January — included in these are errors that relate to assessment calculation and subsequent reputation risk if issued into the community
- In excess of 800 issues have been raised in the Pre-Production Pilot. More than half of these are system defects or design changes from our existing systems that the business was unaware of. …
- Currently a number of fixes are being deployed and then undergoing product testing. …
- o From a business perspective, our key issue will be the number of issues on hand at mid January that have not been corrected and the extent of the workarounds required. …
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- o Functionality affected includes lodgment, accounts, debt, account enquiries, … These impacts may result in returns unable to be processed, returns stuck in the system, lost forms and refunds, account fixes required due to data corruption and impacts on interoperability with third parties.
- o Our understanding is that most of these issues will be fixed over the next few weeks. From a business perspective we consider that we could manage workarounds along with increased associated hardship cases with additional resources of around 1300 for the months of April onwards — however if errors on hand required workarounds of a greater magnitude this would cause too much stress on the operational business and would be unworkable. We anticipate that on average an outstanding SEV 1 error has an impact of around 100 to 200 FTE in workarounds and affects around 250,000 to 300,000 clients. …
- o If there is continued delays in the issuing of amendments, the results planned in respect of compliance activities will be impacted and revenue outcomes will be at risk.
• While some of these issues have been manageable in FBT and Superannuation releases, the size, scale and impact of these issues will not be manageable in the Income Tax Release. …
3. Pre Production Pilot (PPP)
The original objectives and outcomes expected of the pilot have only been partially met: …
The Pre production pilot environment and functional limitations had meant the pilot was unable to reflect the end to end process or the entire internal and external experience.
However, the PPP has helped identify a number of critical defects (refer above) and design issues. For example:
• Defects relating to Medicare Levy, Eligible Termination Payments and Income Averaging …
5. External Readiness
The external community have been provided with the information that can be provided to them at this stage. Our focus has been on tax agents, BAS Service Providers, legal practitioners and large corporates. …
However, it should be noted that other than messages to lodge early and potential impacts on processing in the new year, there has been no direct impact on the external community at this time. With the potential for significant systems errors impacting on certain classes of clients in their assessments or accounts’ records, coupled with the general difficulties of a deployment of this size, the level of tolerance from the business community and tax practitioners in particular will be greatly tested.
Through the external forums it is clear that the large corporates, professional associations and tax agents do appreciate that the system will not be without significant impact on the ATO service delivery. As experienced in the [delivery of the] tax bonus [initiative,] as soon as there is an impact on their individual practices there is a point the ATO risks the lose [sic] of patience from the community. This has been sought to be managed through
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planned communication and intelligence collection processes to keep the external community informed on how to work with the new system. The success of this will not only be influenced by our actions but also the level of leeway given to the ATO over a long period.
Tax professions have advised that while they appreciate the size of the deployment and will be understanding; their members will need to be able to explain to their client’s reasons for delay and any inaccuracy. How long this can be accepted will be determined by their general perceptions and feedback based on perhaps isolated instances, rather than the rate of our systems corrections or ongoing contingencies.
Based on the identified systems issues at this time, it is reasonable to assume that there is a greatly increased risk that the tax profession generally or the representative groups could much earlier than previously anticipated, lose confidence in the ATO’s data integrity and processing ability or their belief that the system was ready for deployment from their perspective.
6. External Readiness (Third Parties)
External government agencies and other impacted 3rd parties are aware of and ready for the impacts the planned R3 IT changes will have on them. Our ability to interoperate with other agencies such as Centrelink and CSA is still under test and therefore represents reasonable risk to the Go-Live decision. …39
3.63 In terms of the 14 key production scenarios, the ATO assessed the following as having a high risk:
Return processing — Credit assessment (assuming that conversion issues were resolved, otherwise the rating would be assessed as ‘Severe’)
Return processing — Debit Assessment
Manage accounts in debit.
3.64 The key scenarios, Manage lodgement obligations and Data and transactions exchanged with the Reserve Bank of Australia, Centrelink, Department of Education and Workplace Relations and the Child Support Agency, were rated as an overall significant risk. The remaining scenarios were either rated moderate or low.
3.65 In terms of anticipated delays in return and amendment processing, the ATO estimated that it would not meet its service standards (processing 94 per cent of individual electronic income tax returns within 14 days) until the 2010–11 income year if it could achieve system ‘functionality’ by May 2010. If functionality was not achieved by May 2010, the ATO estimated that it would not likely achieve these service standards for the 2010–11 income year as well.
39 Australian Taxation Office, Business Readiness: Executive Summary, Business Readiness Assessment for Change Program Release 3 Income Tax, document attached to the agenda for the 22 December 2009 meeting of the Change Program Steering Committee, pp. 1-6.
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3.66 The ATO estimated that around 170,000 taxpayers would ask for priority processing of refunds over the February to April (inclusive) period, requiring up to around 520 full time equivalent staff to action.
3.67 The level of business impacts was related to the level of outstanding defects that needed to be resolved.
3.68 On 19 January 2010, Capgemini’s assessment of Severity 1 defects stood at 54.40 Capgemini also advised that a number of unidentified defects were likely to arise in production.
The number of issues and defects raised in Parallel Run and Business Pilot identified that there were and potentially is a substantial number of latent issues that are outside of the scenarios covered in the Product Test. This means that these undiscovered issues will be experienced in Production, with unquantifiable impacts. …
the Capgemini IA [Independent Assurer] consider that despite the best intentions to have additional business testing activities prior to the Income Tax deployment, the technical delivery will largely follow the same pattern as prior Releases with the final codebase not being validated until it is in a Production environment. As a consequence, Capgemini anticipates that, as with prior Releases, the level of issues and defects that arise in Production will be at a level four or more times greater than that identified in the final stage of testing. Combining this with the very high number of Severity 2 defects that are already known and/or expected to arise in the initial months, Capgemini considers the likelihood of substantial business and technical issues to be Very High.41
3.69 The ATO’s post-implementation Release 3 reviewer, CPT Global, notes that this assessment of all the known defects was taken at a point in time and the context surrounding this assessment should be understood. Up to the point of deployment, the trend was that a significant number of defects were being identified and resolved each week. It can be predicted that if testing had continued, more defects would have been identified at around the same rate. The implication is that further defects would likely be identified in production, which was generally confirmed by the defects that arose in production — as at 5 May 2010, 395 e-fixes were deployed, an average of approximately 30 per week.
3.70 The ATO has advised that not all of these e-fixes were to fix code defects, as a number were due to the ATO manually manipulating systems controls, such as ‘turning on and off’ the safety net.
40 Capgemini, letter to the Australian Taxation Office, 21 January 2010, p. 2. 41 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent
Assurer Report Version 1.0 – FINAL, Period covering 23 December 2009 – 14 January 2010, report to the Australian Taxation Office, Canberra, January 2010, pp. 3-4.
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ATO acceptance of likely significant post-deployment defects and the implementation of post-deployment problem mitigation plans
3.71 From the above account, it is clear that the ATO was aware of the risk that significant unidentified problems or defects may arise in production. The ATO’s approach to managing those risks was to implement a range of post-deployment problem mitigation mechanisms which included the following elements:
Transition team — The ATO has advised the IGT that it had intended to retain 20 of the original program development team for a further five months after deployment to identify and fix systems errors, if and when they arose.
Production pilot — In the first two weeks after deployment, the ATO intended to pilot the processing of tax returns. This involved feeding a small number of returns into the system and verifying the outputs of that processing before issuing any correspondence to taxpayers. This production pilot would be ‘ramped up’ progressively and checked for performance outcomes.
Safety net — In December 2009, Accenture developed a ‘safety net’ which could reduce the adverse impacts of incorrect assessments and correspondence issuing by stockpiling these if they contained any known or suspected defects. It would allow the ATO to suspend a form with particular characteristics from progressing further in the system, such as income tax returns involving primary production averaging calculations. Once the underlying defect affecting the stockpiled forms was fixed, the safety net allowed the ATO to re-process those forms. This mechanism reduced the risk of issuing incorrect assessments to taxpayers, but did so at a cost because there would be significant delays encountered by taxpayers and tax practitioners. However, there was still a residual risk of issuing incorrect assessments where the ATO was unaware of the defect and that defect had progressed through the system.
Integrated support model — Generally, the integrated support model was an ATO framework for identifying, escalating, prioritising and resolving potential problems encountered. An overview is reproduced in Appendix 8. At the ground level, there were expected to be some 12,000 ATO staff, supported by 600 ‘expert users’, using the new systems and processes after the income tax release’s deployment. If, after consulting a list of known issues and workarounds, these problems were unable to be resolved by ATO staff, the problem was to be escalated to an expert user. Expert users were involved in the business pilot and received training on the new systems. Expert users were expected to have daily phone hook ups to exchange observations and experiences. If the expert user was unable to resolve the issue, the matter would be logged as an ‘Infra’. The Business Issues Management (BIMs) team met daily to prioritise new Infras and ensure that they were being referred to the appropriate areas for resolution. Those Infras with significant impacts were raised with the Leadership Strategy Group forum, who then would refer the matters to the nerve centre, a forum chaired by the Second Commissioner responsible for the ATO’s Operations. In this way senior ATO management were made aware of the most significant defects with the system.
Release updates — Release updates deploy consolidated changes to the system after sufficient testing. The ATO scheduled the following releases post-deployment:
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TaxTime 10 Sub-release for 26 March 2010, ITR Stabilisation release for 26 April 2010, and the TaxTime 10 pilot release for 26 June 2010. Other releases were also scheduled for deployment in September/October 2010 and December 2010.
Emergency fixes (‘e-fixes’) — Emergency fixes are applied on an ad hoc basis to remedy particular and significant defects, indicating a lack of a stable code base. Generally, these fixes are so urgent that the ATO considers they must be dealt with before the next software update release is deployed. The testing for e-fixes is limited compared to the testing for scheduled release updates. This is due to the urgency to implement these fixes. However, it also imports an increased risk because it may give rise to unintended and significant consequences.
Workarounds — Non-critical system problems could also be addressed through manual workarounds. Sustainable workarounds were a feature of the ATO’s pre-existing legacy systems. Problems with unsustainable workarounds were classified as ‘Severity 2’ defects (see above). Unsustainable workarounds are by their very nature very costly and difficult to maintain for any extended period.
Staffing — The ATO also prepared to have at its disposal a large number of staff. In terms of processing returns for previous years, the ATO would normally have around 300 full-time equivalent (FTE) staff. After deployment of the income tax release the ATO aimed to have an additional 440 to 680 FTE staff to help manage the deployment from February through to June 2010, with an ability to draw on an extra 1300 to manage workarounds for any systems defects from January through to June 2010. The ATO could also transfer incoming telephone calls to an external service provider if needed.
Hardship/Priority processing — The ATO was prepared to apply ‘an adjusted interpretation’ to the technical definition of hardship to minimise the impact that delayed refunds may have on cash flows.
External Readiness and Intelligence Knowledge reporting — The ATO implemented a system of capturing community feedback to highlight key topics generating the most enquiries, the community impacts identified and provided a level of insight into the ATO’s responses to the community feedback. The framework for this reporting is set out in Appendix 9.
Full regression testing — Accenture advised the ATO that it would complete full regression testing before the deployment of the income tax release. The regression testing was to cover the income tax, FBT, superannuation and Interpretative Assistance releases. Accenture advises that this testing was completed in January 2010.
Run ahead — A post-‘go live’ process where the ATO would run full production files in a parallel test environment prior to running them in a live environment, in order to warn of any potential issues. The process ran for approximately 2–3 weeks.
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ATO income tax release — 21 January 2010 ‘go live’ deployment assessment
3.72 On 21 January 2010, the CPSC met to decide whether the ATO was ready to deploy the income tax release. Overall, the ATO’s own internal advice was that significant defects would arise in production:42
Conclusions
Significant progress has been made over the past few weeks to complete execution of the inventory of Product Test scripts and to achieve pass rates that indicate satisfactory remediation. Testing of OA functionality and resolution of defects seems likely to be also achieved close to “Go Live” and before the functionality is needed in a production sense.
Despite an unprecedented range of testing, it is virtually certain that significant errors will emerge as processing ramps up. Critical to the decision to deploy is assurance that sufficient capacity exists to effectively deal with these issues as they emerge. In response to this, learnings from previous releases have been accommodated in a revised support structure, and additional resources have been quarantined to be on “standby” as needed.
3.73 The ATO also assessed the risk of key ATO business functionalities:
Key Production Scenarios — at the CPSC of 22 December five production scenarios were considered at risk:
• scenario 1 and 2 (return processing credit assessment and debit assessment);
• scenario 3 (manage lodgment obligations);
• scenario 5 (manage accounts in debt); and,
• scenario 14 (data marts and reporting cubes).
All scenarios were reviewed at a workshop on Monday 11 January 2010 and the results were tabled at the CPSC meeting on 14 January 2010. Further work is required to update these scenarios with the final Product Test Memo listing of outstanding defects. This will be completed before Go Live. Key points are:
• Scenario 1 and 2 risks are mitigated largely through the resourcing to monitor messaging queues and replay messages. In addition the proposed safety net utility will enable forms with potential calculations errors to suspend. While this safety net utility is a blunt tool (that is will not be able to discriminate in terms of variations within a calculation set) it will enable forms not impacted to issue.
• Scenario 3 is dependant on the availability and operational maturity of the treatment plans.
42 Australian Taxation Office, Deployment Release 3 Income Tax, document attached to the agenda for the 21 January 2010 meeting of the Change Program Steering Committee, p. 1.
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• Scenario 5 is also dependant on the availability and operational maturity of the supporting treatment plans. This scenario also requires payment plans to be operational. The risks here are understood.
• Scenario 14 has mitigations (or planned mitigations) for scenarios where reports may not be available Day one.43
3.74 The ATO also considered whether it could support the income tax release after deployment:44
This point is made up of several sub points:
• Tax-time 2010. Overall the current status for Tax-time 2010 for ICP is rated amber. Key risks for the Tax-time 2010 release are delivery the Employee Share Scheme measure and finalisation of the scope of change requests associated with Super Co contributions and calculations of assessable income for eligibility of benefits purposes.
At the CPSC of 14 January you agreed that to ensure that the Income Tax deployment does not impact the delivery of Tax-time 2010 it is critical that staffing and environments required to deliver Tax-time 2010 are quarantined — that is kept dedicated to Tax-time 2010 delivery.
Stabilising the Income Tax code base before 1 July 2010 is the key Tax Time 2010 risk.
The detail provided later in this submission under supporting the Income Tax Release in production provides further assurance that every effort is being taken to stabilise the Income Tax code base ahead of the Tax Time processing period from 1 July 2010.
• Delivering deferred functionality, severity two defects fixes, and deferred approved change requests; and, responding to critical production issues — progressing but not completed.
Support manual reconciliation and retrieval of errors in the messaging system
The assessment of capacity to support Income Tax post deployment has been completed. Key points:
� There is sufficient capacity to deliver the known program of work for April 2010 — this is work agreed with Operations, Compliance Subplans and CFO representatives required before the 2010 tax processing cycle. …
� There is sufficient capacity to support Production across the following areas:
- Deferred ITR defects,
43 Australian Taxation Office, Change Program Steering Committee Briefing Paper, Release 3 Income Tax Go Live Decision Framework, document attached to the agenda for the 21 January 2010 meeting of the Change Program Steering Committee, p. 2.
44 Australian Taxation Office, Change Program Steering Committee Briefing Paper, Release 3 Income Tax – Four key areas for assessment from CPSC of 22 December 2009, document attached to the agenda for the 21 January 2010 meeting of the Change Program Steering Committee, pp. 2-3.
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- Mandatory items from the backlog of production defects,
- Unapplied Retro fit items
- Operational reporting (includes queue management and reconciliations)
- BAU [Business As Usual] Productions Support, and
- Technical workarounds
� There is additional capacity to respond to critical production issues that will arise post deployment. 54% of available resources will be retained for this work effort. Critical production defects will be corrected through emergency fixes (e-fixes) and e-fix windows have been established for Tuesdays and Thursday evenings and weekends.
� The level of resourcing has been set to provide maximum capacity respond to critical production incidents. This level of resourcing will be reviewed in April as a transition checkpoint.
� We have assessed the capacity to support manual reconciliations and the retrieval of errors in the messaging system. We have put in place a quarantined workforce that has been sized based on operational experience as well as anticipated workloads that have been modelled based on results from performance testing. In addition to the quarantined workforce we have an additional capacity of 40% that can be quickly re-tasked to provide additional support.
3.75 In relation to the progress in resolving defects, Accenture advised that of the Severity 1 defects, 20 had been tested and awaiting ATO sign off; 20 were in the code, had been executed and were awaiting verification; three had been reclassified according to remediation plans; and the remainder were in the code and awaiting execution. The ATO confirmed that the numbers had changed as a result of rectifying and successfully retesting some of the defects and reclassifying the defects according to mitigation and/or remediation plans (such as fixing them after deployment). As at 21 January 2010, the ATO agreed45 that the number of defects was:
Severity 1 defects — 0
Severity 2 defects —229
3.76 Of these 229 Severity 2 defects, the ATO:
identified 6 defects as e-fix candidates
scheduled 153 defects for resolution in the April 2010 release update
scheduled 24 defects for resolution in the December 2010 release update
45 Australian Taxation Office, Minutes of the 21 January 2010 meeting of the Change Program Steering Committee, p. 6.
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was still awaiting scheduling the remaining 46 defects for resolution.46
3.77 Both Capgemini and Aquitaine accepted that the re-evaluation presented significant business risks for the ATO as they considered that it was certain that defects would arise after deployment. However, they advised that the risks could be reduced by the post-deployment problem mitigation mechanisms (outlined above).
3.78 In any event the ATO planned to use the late-April release update to resolve any Severity 1 that might arise and many existing Severity 2 defects that had their resolution deferred:47
Key Points:
3 Planned pre-July ICP Releases: March (FBT [Fringe Benefits Tax] TT10 [TaxTime 2010], Late April (ITR [Income Tax Release]/Maintenance) called “Planned ICP Fix Release April”, June (IT TT10) …
Late April planned ICP release will focus on deferred ITR SEV1 and SEV2 as well as critical post deployment defects that must be included in a release structure versus eFix approach
Rationale for late April is to provide bulk of change as late as possible but before code freeze / cut for final round of TT10 Regression Test.
ATO costs of delaying deployment after February 2010
3.79 Ultimately, the ATO needed to decide whether the risks of deployment (in light of post-deployment problem mitigation mechanisms) outweighed other factors, one of the main ones being the costs of delaying deployment.
3.80 The ATO estimated that delaying the deployment would mean that the next viable date for deployment was in January 2011. This was because this was the next date which provided enough time to fix defects identified after implementation and stabilise the system before preparations for the peak lodgement periods in May-November. Also an April deployment date may not give a sufficient settling in period and therefore was high risk because there was less capacity to gear up to deal with any potential problems.
3.81 The ATO also considered that major ATO data site management issues that were also on the work horizon had the potential to further restrict or delay the Change Program’s development if the income tax release deployment was deferred.
46 Australian Taxation Office, Income Tax Summary Status 20th January 2010, document attached to the agenda for the 21 January 2010 meeting of the Change Program Steering Committee, p. 4.
47 Australian Taxation Office, Income Tax Deployment, Tax Time 2010 and Transition Program of Work Plan: attachment B to Release 3 Income Tax – Four key areas for assessment from CPSC of 22 December 2009, document attached to the agenda for the 21 January 2010 meeting of the Change Program Steering Committee.
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3.82 The ATO was aware that delaying the deployment of the income tax release by one year would potentially result in the following:
increase ATO costs by more than $200 million
increase ATO costs of around $7-8 million to use pre-existing legacy systems to deliver that year’s TaxTime
a high risk of losing key people over another year, either to other international projects or retirement
no significant reduction in the risk of unexpected or unknown problems or delays.
ATO independent assurers’ assessments — income tax release ‘go live’ deployment decision
3.83 Both Capgemini and Aquitaine were prepared to support a ‘go live’ decision, subject to certain conditions.
3.84 Capgemini supported a ‘go live’ decision because, amongst other things, it had confirmed with the ATO that all pre-existing Severity 1 defects in the product code and conversion were either:
a) Reclassified according to mitigation and or remediation plans such as fixing in production or during the weekend conversation, or
b) Rectified sufficiently and successfully retested to the satisfaction of the ATO.48
3.85 However, Capgemini advised that their role was to assure the technical implementation of the release on the basis of technical elements only. They noted that while there were significant risks in other areas (that is, non-technical elements), there were mitigation strategies in place for these risks and that, ultimately, it was a decision for the ATO as to whether these non-technical risks were acceptable.
3.86 Aquitaine assessed the systems readiness and rated it as ready to go (noting that it was previously rated not ready to go based on previous conversion issues and lack of clarity around support arrangements, but that these aspects were now covered off). In doing so, Aquitaine assessed staff readiness and external readiness as ready to go live. Key production scenarios were also assessed as ready to go live, with the outstanding defects as minimal because the ATO was well prepared to deal with those risks.
3.87 However, Aquitaine noted that there would be a number of risks. Aquitaine estimated that as at 11 January 2010, there would be an estimated 50,000 individual assessments affected:
A small number of assessment defects (in [key production] scenarios 1 and 2) are still outstanding, but are expected to impact less than 50,000 individual assessments annually,
48 Capgemini, letter to the Australian Taxation Office, 21 January 2010.
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from a total taxpayer base of 14.5 million. Clearly, the ATO needs well developed processes to identify and rectify any errors that come to light through feedback from the community, further minimising any impact on taxpayers;49
3.88 Aquitaine also noted that due to the intended ramp up, activities around the maintenance release and preparation for TaxTime, it would be reasonable to expect widespread delays in processing that would affect most taxpayers across the board until the end of the year.
ATO decision to deploy the income tax release — the ‘go live’ decision
3.89 The ATO decided, after considering the internal and external advice, to continue with the deployment schedule by deploying the income tax release on the Australia Day weekend, noting that if there was a catastrophic event, it had an option until 31 January 2010 to back out of the new systems.
3.90 An independent post implementation review conducted by CPT Global on the deployment also supported the ATO’s decision to go live, but with important situational conditions:
The quality of the ICP software was not as high as it should have been (The ability to Safety Net and stockpile transactions essentially reduced the impact of defects that otherwise would be classified as Severity 1 defects. This in no way can [be] considered as a way to improve software quality.), but it was most likely as good as it was going to get in the short to medium term. A decision to defer implementation would have resulted in additional risks for the project that outweighed the risks of implementing.50
ATO INCOME TAX RELEASE’S DEPLOYMENT
‘Go live’ — stockpiled returns, conversion, ramp up and back log catch up
3.91 In preparation for a possible deployment, from 23 December 2009 the ATO had stopped entering any new income tax returns received into its pre-existing legacy systems. It stockpiled any returns received after this date, with the intention of inputting those returns into the new ICP system soon after that new system was deployed. The ATO advises this stockpiling was needed to give the pre-existing legacy systems a month to ‘flush through’ returns before any conversion of records could take place.
3.92 The income tax release was deployed over the Australia Day long weekend (23–26 January 2010) by converting around 27 million taxpayer records, 32 million
49 Aquitaine Consulting, letter to the Australian Taxation Office, 21 January 2010, p. 2. 50 CPT Global, Release 3 – Income Tax Implementation Review, report to the Australian Taxation Office, August
2010, p. 6.
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accounts and 282 million forms. Accenture reported that a number of e-fixes were applied.
3.93 By 2 February 2010, the ATO had passed the point of being able to ‘roll back’ the ICP system and use the legacy systems.
3.94 Over the next two weeks the ATO started a pilot process for tax returns — a production pilot. This involved feeding a small number of returns into the system and verifying the outputs of that processing before issuing any correspondence to taxpayers.
3.95 By 9 February 2010, the ATO had caught up on accounts and payments and these were being processed as received. Also, 3700 income tax returns and schedules had been processed and verifications done. Some of the errors found, as explained above, were resolved through e-fixes. Non-critical errors were scheduled for later releases. However, the ATO considered that it was coping with the pace of e-fixes.
3.96 From 15 February 2010, the ATO progressively increased the number of tax returns it entered into the system. By 1 March 2010, all returns on hand (around 1.03 million returns) had been entered into the new system.
3.97 On 2 March 2010, Accenture reported to the ATO that they:
Have caught up on back log. All of the February's forms received are now into system. Ran a batch on those last night. Normal processing will now begin and forms will now be processed as received and not stockpiled.51
3.98 On 2 March 2010, the ATO publicly reported on its website that:
We have processed around one million income tax returns using our new system, including all stockpiled returns and returns received up until the end of February. Refunds and assessments have progressively been issuing since mid-February, and some people have already received refunds … The majority of refunds for returns lodged in December or January have been issued, and the majority of refunds for returns lodged in February will issue by the end of next week, 12 March 2010 …
If we take longer than 30 days to process returns, we will pay interest.
As usual, some refunds will take longer to issue — for example, if they involve complex tax affairs or we need to check the legitimacy of a claim for a refund.
Please note, it can still take a few days from the time we issue a refund for it to reach its destination as it goes through the mailing and distribution process. From now on, the majority of people who lodge should receive their refund or notice of assessment within our normal turnaround time of 14 days. If they lodge by paper, individuals should have it within 42 days and non-individuals within 56 days.
51 Australian Taxation Office, Minutes of the 2 March 2010 meeting of the Enterprise Solutions & Technology Sub Plan Executive, p. 16.
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If people are expecting a refund and want to check its progress they can call us on 13 28 61 …
We understand the delays have caused problems for some people, and we are grateful for their patience. Our thanks also to the tax profession for their input, advice and patience throughout this process. We appreciate their efforts to complete and lodge their clients 2008-09 returns and look forward to working with them again as the 2010 tax time period fast approaches.52
3.99 Over the next few days, the content of this information was disseminated at various forums.
TAXPAYER AND TAX PRACTITIONER EXPERIENCES WITH THE NEW SYSTEM
DURING FEBRUARY-JUNE 2010
3.100 Set out in narrative form below are the main concerns raised by taxpayers and tax practitioners with the IGT. This is not an exhaustive list of those concerns, but it conveys the typical problems encountered by affected taxpayers and tax practitioners over the February–June 2010 period and the tone of their interactions with the ATO.
3.101 As previously stated, the ATO’s planned communication and intelligence collection strategy included providing information to the community and regular teleconferences with tax practitioners and their representative bodies and associations. This group, called the Change Program Consultative Group, had its first teleconference on 5 February 2010 with twice weekly teleconferences until 2 March 2010, when planned teleconferences were intended to be discontinued. During these teleconferences, issues with the Change Program, including those relating to the income tax release deployment, were raised and discussed.
3.102 The ATO’s publicly stated expectations leading up to the deployment of the income tax release were that processing delays would be experienced from end of December through until March 2010. During these scheduled teleconferences no significant concerns or complaints were raised by tax practitioners or their representatives.
Problems created by new ATO Notice of Assessment (NOA) and Statement of Account (SOA)
3.103 From 26 February 2010, some tax practitioners had started to raise concerns with the ATO as they received their clients’ Notices of Assessment (NOAs). These initial concerns mainly centred on the design and functionality of the NOA and the related costs. For example, some tax practitioners said that the NOA was lengthy, did not identify the taxpayer on every page, and there were problems with some of the data being read by commercial software and optical character recognition (OCR) equipment. Some tax practitioners stated that their costs had almost doubled due to the
52 Australian Taxation Office, Latest update from Second Commissioner David Butler - 2 March 2010, available from www.ato.gov.au.
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increased size and that the SOA and NOA were sent in two separate envelopes. The following is an extract from one of the tax profession representative bodies’ submissions. It quotes material that one of their member tax practitioners provided to it.
[The NOA] is in 2 separate documents, 4 pages each. There is a separate page to show how the PAYG and other credits on the assessment notice has been calculated (2 lines only) but no subtotal to indicate that these figures relate to a single amount printed on the face of the assessment notice. No wonder clients cannot read these documents! and there is no reason it would not have easily have fitted on the first page anyway.
The Statement of Account, which arrived 3 days later, has a nil balance, (page 1), 3 entries on page 2, with other confusing YTD figures that are in no way relevant to the point of the statement, with past year figures provided (why on earth???).
… This is such a waste of my time and that of my staff. I am sure it does not bother the ATO because we have to do it all ourselves on the Portal.
Concerns that delays were much longer than expected and confusion with new ATO terminology
3.104 By 5 March 2010, some tax practitioners were also concerned about the delay in issuing NOAs for returns lodged during December 2009. They pointed to the ATO’s November and December 2009 communications that stated that delays were expected to be resolved by March. They also pointed to the ATO’s recent communications (such as the 2 March 2010 communication extract quoted above) saying that all returns were processed and there was no backlog. Tax practitioners understood this to mean that most of the previously delayed returns were about to issue.
3.105 From 8 March, a number of further problems were identified by taxpayers and tax practitioners. Tax practitioners were now expressing concerns with electronic funds transfer (EFT) reconciliation summaries and confusion on what some of the terminology of postings on the new system meant (such as ‘processed date’ and ‘effective date’ and the time between both).
3.106 Tax practitioners were unaware that one of the main material differences between the ICP system and the ATO’s pre-existing legacy systems was that the ICP system will post an amount to the taxpayer’s account before running credit risk assessments and offsetting amounts against other liabilities. The legacy system posted the amount to the account after running these routines. This means that under the legacy systems, tax practitioners who accessed the tax agents’ portal would only see an amount posted to their client’s account when a NOA was ready to be issued. In contrast, under the ICP system an amount could be shown on the client’s account but a NOA would not be posted for a substantial time later if there were delays experienced after posting — such as credit risk assessments or offsetting against Centrelink debts.
3.107 Another material difference between the legacy and ICP system was the use of unfamiliar terminology or terminology that was familiar but had a different meaning. For example, under the legacy systems, tax practitioners understood ‘processed’ to mean that the tax return had been assessed by the system and the NOA was to issue
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(subject to its position in the printing queue). However, under the ICP system, the ATO used the word ‘processed’ to mean that the tax return form had successfully entered the forms and payment processing module — that is, the ICP system had recognised the form. It did not mean that the form had passed all checks or that the form was not subject to officer intervention or remedial action (for example, because the form had suspended).53
3.108 Tax practitioners also observed that interest was being incorrectly calculated and not being offset against other accounts in debit. Some practitioners also expressed concern that Centrelink were demanding payment from their clients, which was based on incorrect data from the ATO. They claimed that the ATO system was treating negative taxable income amounts as positive and communicating that amount to Centrelink as a positive amount. (Although, the ATO has advised that this was a Centrelink problem — the ATO sent it across as a negative value and Centrelink interpreted it as a positive figure.) This threatened their clients’ eligibility to Commonwealth benefits.
3.109 On 8 March 2010, the ATO call centres were unable to deal with the volume of incoming calls. A recorded message told callers that the ATO was unable to answer their calls immediately because of the ‘high level of calls’. Until 16 April 2010, no alternative number was given and any calls that did not enter the telephony queues were disconnected. Tax practitioners expressed concerns with the amount of unproductive time that they were spending in dealing with the ‘ATO’s errors’. Tax practitioners said that they were losing confidence in the ATO call centre’s ability to understand and explain what was happening, and at times giving messages inconsistent with those on the ATO’s website:
The ATO stated in its press releases that it has processed 1 million returns to date. Previously it stated that they had processed 400,000 returns in the week ending 24 February and would process 300,000 in the week ending 5 March. We told our clients that the word "processing" might not have the same meaning as they would expect because the refunds still needed to go to a mail house and they had to allow another week on top of this. Today, Monday 8 March, a client rang me asking about his refund that he desperately needs. So we rang the ATO and they stated that they still had a large backlog and that they will fast track this taxpayer's refund. However they also stated that this fast tracking will take 14 days. We have received very few Notices of Assessment so far. The only conclusion that we are able to draw is that the ATO is not being truthful in its press releases.
3.110 By 12 March 2010, some of the tax profession representative bodies were concerned with the increasing numbers of complaints from their members and the escalating tone of these complaints. They approached the ATO for clarification. The ATO advised the tax profession representative bodies that they expected delays to be resolved by 12 March 2010. However, tax practitioners continued to observe delays. Some tax practitioners remained sceptical:
53 It should be noted that the ATO published a description of these terms six months later on 9 September 2010.
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Returns lodged before Christmas still not processed as promised, back log caught up by the end of February hasn't happened as promised, call centre team leaders do not call back with answers as promised, "Relationship Managers" ignore faxes, ELS reconciliation reports still not being received. And obviously nobody cares, we are expected to try and work with the mess. Does anybody have any idea when things might start to happen again? The excuses are starting to wear thin and we are getting no support from the ATO.
3.111 Some tax practitioners said that their clients were concerned with the delays. The tax practitioners had told their clients that they had already lodged the tax returns but they were being told by the ATO that the ATO had problems with the new system and was slow in issuing refunds. However, when some of these taxpayers contacted the ATO, the call centres said that the system was telling them that the return had not been lodged. Taxpayers questioned tax practitioners and asked the tax practitioner to provide proof that they had lodged the return.
3.112 By this time, tax practitioners and taxpayers observed that the ATO call centres were no longer giving expected dates for issue, but were telling them that the matter had been escalated and to wait another two weeks.
ATO problems with issuing certain taxpayer refunds
3.113 Some tax practitioners also observed that certain refund cheques were not issued to taxpayers:
Just received a statement for a client's income tax account … but it would appear that the ATO is back to its bad old tricks and retaining refunds due from an Activity Statement and applying the money to the income tax debt, due 15 May 2010. I thought that this was something that we jumped up and down about several years ago. I contacted the ATO and received the party line as read out, but when asking why this was something that was stamped out previously was put on hold for 10 minutes. I will have an answer "shortly", but the service standard is, of course, 28 days. Will not hold my breath.
3.114 On 15 March, the ATO provided another website update:
At our last update on 2 March 2010, we were on track to issue the remaining stockpiled refunds and assessments for income tax returns lodged in February by the end of last week.
Last week we experienced some minor problems which have delayed us issuing some of those remaining stockpiled refunds and assessments while we ensure the integrity of our data.
There are approximately 200,000 stockpiled assessments yet to issue (of which we estimate 100,000 are refunds). These include assessments which involve a baby bonus, entrepreneur tax offset, primary production averaging, exempt foreign employment income, special professional averaging, eligible termination payments or superannuation lump sum payments and non-resident withholding tax.
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We have fixed these minor problems and can start releasing most of these refunds and assessments from today (with the exception of assessments involving non-resident withholding tax).
We remain committed to ensure the reliability of our processes even if this slows us down.
If you are expecting a refund
For the past two weeks, we have been processing returns within our normal turnaround times. As usual, some refunds will take longer to issue — for example, if they involve complex tax affairs or we need to check the legitimacy of a claim for a refund. It can also take a few days from the time we issue a refund for it to reach its destination as it goes through the mailing and distribution process.
If you are expecting a refund and want to check its progress, call us on 13 28 61. If we take longer than 30 days to process returns, we will pay interest.54
3.115 Over the next few days, the content of this information was disseminated at various forums.
3.116 Many tax practitioners, however, remained sceptical:
We all accepted that there would be delays in processing assessments, however it is getting beyond a joke. I checked 21 clients' status on the Portal the other day and to my amazement 12 are shown as "Not Lodged" and the remaining 9 are showing that assessments have issued with "Effective Dates" varying from 24 February to 15 March 2010, yet as of today's date (17th) not one assessment notice has been received. The oldest lodged returns date back to 23 December 2009 and in frustration I contacted the RM [Relationship Manager] section of the ATO. The person from RM has escalated these 2 returns and assures me that another "Case Officer" will contact me about these 2 returns. I won't hold my breath waiting.
…
I’ve got numerous cases in my firm (including me as my own client!) where refund due returns aren’t being processed anywhere near as quickly as payables in the new system. For example:
1.. My return — lodged start of Feb 2010 — have been told that the reason it still shows as “unlodged” on the portal is (a) due to a family tax benefit claim, (b) due to a scripting error in the system, or (c) because they’re trying to verify some other data. I’ve been promised a refund by 12 March which has come and gone, new update is 19 March but don’t hold your breath, still unlodged on the portal. ATO have confirmed lodgement. Threatening ATO with a hardship release claim because I’ve got two car registrations and insurances due end of the month!!!
54 Australian Taxation Office, Latest update from Second Commissioner David Butler—15 March 2010, available from www.ato.gov.au.
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2. Group of company returns all lodged on the same day 26 Feb — assessments already received for nil or payable clients, but refund of $59k for one company still showing as unlodged on portal. Refund is entirely due to overpaid PAYG instalments.
3. Group of 5 family members — all lodged in the same transmission report — assessments received for payable family members, trust return showing as lodged, but two refunds owing to family members still showing as unlodged on the portal.
There is only so many times we can tell the client to remain patient, but who can blame them when they get the bills to pay but not the money they’re owed? What more clear cut evidence do we need that the ATO is systematically not processing refund returns and blaming the “delays” on their change program?
3.117 On 19 March 2010, an extraordinary meeting (teleconference) of the Change Program Consultative Group was held with tax practitioners and their representatives to discuss the progress of returns and ELS reports. The minutes of this teleconference record that, amongst other things, the ATO advised that:
due to recent technical difficulties income tax refunds and assessments were delayed. We have now rectified the technical problem and are planning to forward refunds and notices of assessments to Australia Post early next week. This means that taxpayers should receive their refunds by the end of next week.
3.118 By 22 March 2010, tax practitioners also observed changes to the ATO call centre’s responses to their inquiries on progress of assessments — they generally conveyed that the matter had been escalated and to call back in two weeks if the NOA had not been received by then.
3.119 On 22 March 2010, the ATO directly contacted tax practitioners in a special broadcast (mainly by email and facsimile):
Last week, we experienced an issue that meant we had to stop a significant number of refund cheques from being sent out. This did not affect refunds paid by electronic funds transfer (EFT).
We apologise for the delay, have fixed the problem and resumed processing. The majority of these refunds will be delivered by the end of this week.
The date of issue on these cheques is likely to be from the week end 12 March 2010.55
3.120 On 23 March 2010, the ATO held a workshop with tax practitioners to obtain feedback on the NOA and SOA. A number of issues were raised and the ATO advised that it was aiming to ‘revamp’ the NOA/SOA by 30 June 2010.
Escalating public frustration
3.121 By 24 March 2010, some Federal Members of Parliament and Senators had been approached by their constituents on the issue, with at least one publishing a
55 Australian Taxation Office, email broadcast to tax practitioners, 22 March 2010.
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media release on the problem. Tax practitioners’ frustrations were escalating as demonstrated in the quotes below:
Extremely slow processing of refunds & the huge backlog our clients are experiencing. It has gone on too long. Not only are we every day getting phone calls from clients asking where their money is which is very time consuming, they often blame us for the delay rather than the ATO. Living in a small regional town my staff & I are also being stopped in the street by clients asking about their refunds. This happened to me again today. Enough is enough! Our cash flow is also being affected as a number of clients only pay us once they have received their refund.
The ATO [should] pay for a national media campaign acknowledging their problem immediately & give us all a definite date when they will be up to date. They should set up a special hotline for the taxpayer to ring the ATO rather than their tax agent having to spend time on the portal etc trying to find out where their refund! The ATO need to bear the administrative time answering taxpayers queries not the tax agents! …
I have clients who have not received their refunds when their ITRs were lodged electronically in late December 2009. We have asked for a number of refunds to be “escalated” without much success.
Our cashflow is also being affected as a number of clients only pay us once they have received their refund.
3.122 Some tax practitioners also expressed frustration that the delays in providing refunds was affecting cash flows.
Our client has been waiting for a tax refund of over $100,000 which is recorded on their tax account effective late January but no one I talk to in the ATO can tell me why the refund has not issued. Not to worry! The ATO has escalated the issue and by their own lofty performance standards we should hear something within 2 weeks … With the 14 days having passed since the matter was escalated, I was then put in contact with the relationship manager area. Someone there then called me within the requisite 72 hours they give themselves to respond. The answer?
They have done all they can and the refund should issue but they can’t say when. As this delay is causing the client severe cash flow problems I asked whether there was any other option. Apparently we can call the ATO on 132866 and plead our case. Tried to call, but received the message that they are receiving peak demand at the moment and can't answer our call. Well done ATO.
ATO apologies, concerns with the transparency of ATO communications and continuing problems
3.123 The issue of the delayed refunds was also canvassed with the Prime Minister during a radio interview on 26 March 2010. In response to a question relating to the delays, the Prime Minister commented that ‘I get the Treasurer on to your program and go through the complaints which have been made, and how they'll be rectified.’56
56 Rudd, Kevin, Interview with Jon Faine, 774 ABC Melbourne, ABC Radio, 26 March 2010.
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On this day the Shadow Assistant Treasurer also met with the ATO on the problems and later stated publicly that ‘I was assured that the backlog had been well and truly dealt with.’57
3.124 By 29 March 2010, some tax practitioners were publicly commenting that they had lost faith in how the ATO was dealing with the problem, including their public communications. They raised a range of problems they were experiencing, including impediments to accessing client details on the portal and general delays.
3.125 On 29 March 2010, the ATO published another update to its processing and included an apology:
Processing status of tax returns
I would like to reassure tax agents and the community we are doing everything we can to issue outstanding notices of assessment for 2008-09 income tax returns and I apologise for any inconvenience you have experienced.
We know some people have experienced delays and frustration caused by our essential systems upgrade. Unfortunately, the size of the systems we deal with means they are incredibly complex. Also, given the importance of the tax and superannuation systems to Australia, we need to ensure the reliability of our processes. We appreciate the patience and support people have shown us.
In the information below you will find the status of our processing and answers to some of the questions we are hearing from tax agents and people who have been calling us.
Again, I apologise for any inconvenience by this systems upgrade. …
What has happened over the last two to three weeks?
We had largely caught up with the backlog of returns by the end of February, however on 9 March we discovered a problem with the data in some notices of assessment which had been printed but not sent to taxpayers. Unfortunately, this meant we could not send anything for printing and posting until we fixed the problem.
It took us longer than expected to fix the problem and we recommenced sending notices of assessments to be printed and posted on Monday 22 March.
What if people lodged in December, January or February and still haven’t received a notice assessment?
All remaining 2008-09 tax returns are now moving through our system. As per our published service standards, we aim to process 94 per cent of electronically lodged returns within 14 days and 80 percent of paper returns within 42 days.
Some cases may take longer to process where we may need more information from taxpayers. Sometimes we may also closely examine a return to ensure there are no fraudulent claims or we need to ensure claims are legitimate.
57 Ley, Susan, Interview with Sabra Lane, PM, ABC Radio, 15 April 2010.
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If people think their notice of assessment should be with them by now and they haven’t received it, please call us on 13 28 61. …
What about people experiencing financial hardship?
We have been working hard to ensure we get refunds to people experiencing genuine financial hardship. To date we have helped over 1,000 people who were in this situation.
If people are in this situation we ask that they do not hesitate to call us on 13 28 61 and we will do what we can to help.
Overall are we happy with the implementation of the new income tax processing system?
Yes.
While we have had some problems, you would expect that with an implementation of an IT system as large as this one. There have been no critical systems problems. Overall, the new income tax processing system is working well and, as the figures demonstrate, the vast majority of processing has been completed.
We know some people have experienced delays and frustration caused by our essential systems upgrade. Unfortunately, the size of the systems we deal with means they are incredibly complex. Also, given the importance of the tax and superannuation systems to Australia, we need to ensure the reliability of our processes.
We appreciate the patience and support people have shown us and apologise for the inconvenience.58
3.126 Over the next few days, the content of this ATO information was disseminated at various forums.
3.127 By 30 March 2010, tax practitioners had started to receive cheques that were held up due to a problem with the SOAs not being sent out. However, it appeared that no interest was paid for the delays.
On 29 March, I received a cheque for over $6000 for a client and the cheque was dated 9 March. As the return was lodged on 22 February, an issue date of 9 March would have been the normal turnaround period that was being achieved under the old system so no interest would have accrued. If the assessment were correctly issued on 26 March which must have been the date of posting, a minor amount of interest would be due. My issue is that an observant client will think I have been sitting on their cheque for three weeks but, actually, the Tax Office should be paying them interest. Rang the ATO and (after a long period waiting for a ‘specialist’ to look into the matter) first I am told that as the cheque was issued within the 30 day service period as it was raised on 9 March so no interest applies then (second long wait) — it was accepted that today is outside the 30 day ‘service period’ so the ‘specialist’ was contacted again (third long wait).
58 Australian Taxation Office, Latest update from Second Commissioner David Butler - 29 March 2010, available from www.ato.gov.au.
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Now the question will be sent off to [the] accounts department for review as the ‘activity’ was 23 March and then I pointed out it was received today so the assessment must have been posted on 26 March so it gets an escalation number with an action date of 9 April and I know that I will have to spend another half hour in the middle of April to get an apology and the client’s few dollars of interest.
I have observed that the Tax Office also seems to have changed their telephone answering system so that when the operator does not know the answer, which is normally the case or I would be able to find out the answer, they check with a ‘specialist‘ and if the facts asked are not quite correct when they ask the ‘specialist’ you end up on hold for another 15 minutes whilst they try again and again and again … it has taken so long for the ‘specialist’ to work things out after receiving the wrong question for the operator that I just keep typing to prevent the steam from lifting the lid!
3.128 On 1 April 2010, the ATO published another apology and an update on its processing:
I would like to reassure tax agents and the community we are doing everything we can to issue outstanding notices of assessment for 2008-09 income tax returns and I apologise for any inconvenience you have experienced.
We know some people have experienced delays and frustration caused by our essential systems upgrade. Unfortunately, the size of the systems we deal with means they are incredibly complex. Also, given the importance of the tax and superannuation systems to Australia, we need to ensure the reliability of our processes. We appreciate the patience and support people have shown us.
In the information below you will find the status of our processing and answers to some of the questions we are hearing from tax agents and people who have been calling us.
Again, I apologise for any inconvenience caused by this systems upgrade. …
Total returns loaded to the new system February to 24 March 2010 — 1,086,000
Notices of assessment
Total issued to taxpayers (of which 170,000 issued this week) — 720,000
processing through the system and will be printed shortly — 216,000 (Planned issue date — During the week commencing 5 April)
normally on hand at any given time — 150,000 (Some cases take longer to process where we may need more information from taxpayers. Sometimes we may also closely examine a return to ensure there are no fraudulent claims or we need to ensure claims are legitimate.)59
3.129 The ATO also directly contacted tax practitioners in a special broadcast on 1 April 2010:
59 Australian Taxation Office, Processing status of tax returns - latest update 1 April 2010, available from www.ato.gov.au.
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Incorrect due date on notices of assessment
Some debit notices of assessment that issued since 23 March 2010 have incorrect due dates between 6 and 9 April 2010. We are aware that these dates do not allow sufficient time for payment.
We apologise for any inconvenience this may have caused. We are fixing the problem and will advise you of an extended due date for your affected clients.
Please do not contact the ATO about this issue.60
3.130 By this time, many tax practitioners were increasingly concerned with the ATO’s response to problems:
It is accepted that when major systems upgrades occur, there will be issues and problems that arise that will need to be corrected. The “right” way to approach these issues and problems is to be upfront, open and candid about what has occurred and how long it is expected to take fix the problem. The ATO has instead bombarded us with self-congratulatory “slaps on the back” for managing a major change well, telling us (initially) that delays are fixed and everything will be fine. The original news was that the backlog would be cleared by end of February 2010, then came the “one more week” messages and here, on 1 April 2010, we are still waiting for about three quarters of the assessments relating to returns lodged between 23 December 2009 and the end of January 2010, with some returns still being listed on the Portal as being “Not Lodged” (which we are assured have been received).
3.131 On 6 April 2010, the ATO directly contacted tax practitioners in another special broadcast:
Notices of assessment incorrectly advising refunds paid to bank accounts
Some of your clients may have recently received a notice of assessment which advised their refund was paid electronically to their nominated bank account in instances where they have not provided bank account details.
We have identified the clients affected and will issue their refund via cheque.
Your clients can expect to receive their refund cheque from 12 April 2010.61
3.132 By 6 April 2010, a small number of tax practitioners and taxpayers had also made compensation claims. Taxpayers claimed the costs of delays and managing their tax affairs while waiting for the refund. Tax practitioners claimed the costs of having staff idle, the costs in dealing with disgruntled clients inquiring about the progress of their refunds and the reduced number of client refunds from which they recovered their fees.
3.133 On another front, by 8 April 2010, representatives of primary producers said that they had been told by the ATO that:
60 Australian Taxation Office, email broadcast to tax practitioners, 1 April 2010. 61 Australian Taxation Office, email broadcast to tax practitioners, 6 April 2010.
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In January the ATO advised of an upgrade of their computer systems. The computer upgrade when completed had a bug in the new system meaning that it was not able to process income averaging. Primary producers have been told that the ATO therefore will not commit to a time frame for having their income tax returns assessed.
Primary producers have been told that there are 350,000 outstanding income tax assessments and those primary producers make up 100,000 of these, and that the backlog is mainly due to the computer upgrade.
3.134 On 12 April 2010, the Commissioner gave an apology in one of his speeches:
…. Of course, with great change there is a degree of upheaval. We are aware that some agents experienced issues with delays in processing income tax returns and client refunds as we moved to our new systems. I can say that we have now issued 940,000 notices of assessments for individual taxpayers. However, as always we will take more time to look at some returns more closely and overall we intend to be on track to meet normal processing times by the end of April.
These sort of issues can test our relationship, but we have a history of working together to smooth out rough times. Indeed, tax agents have been helping the community meet their tax obligations since the early days of last century. …
However, as the new system is bedded in we appreciate that there have been issues for some tax agents around client refunds and processing of income tax returns. While we apologise for the inconvenience, some disruption was unavoidable given the scale of our endeavour.62
3.135 However, delays and problems continued to be experienced by tax practitioners and their clients, causing the call centre phone lines to experience peak demand and not connect calls. Some taxpayers and tax practitioners said that they were facing cash flow difficulties and problems in meeting upcoming lodgement obligations:
This assessment & refund backlog situation is getting to a crisis point
- we are a small practice and usually get a large amount of our revenue via the tax refunds for clients — we have clients complaining re late assessments and refunds and yet the ATO is still chasing for outstanding payments. Many small businesses including my own will be relying on refunds to fund other tax payments so it is wrong for the ATO to be chasing payments when they owe money to related parties/directors/shareholders etc.
The combination of no/insufficient tax refunds and the banks not lending is hurting small business big time, our business employs/is supporting 5 different families and is currently experiencing a severe cash flow crisis, please ensure positive action is taken immediately to relieve the situation.
62 Commissioner of Taxation, Commissioner's speech to the Association of Taxation and Management Accountants 25th Anniversary Conference, Novotel Hotel, Sydney Olympic Park, 12 April 2010.
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In Mid February when we rang we were told that they would be up to date by the end of February with the processing. To the end of February there were no assessment notices received since before Christmas. …
It is now one month before I have to have everything finished under the standard lodgement programme.
I am behind again this year — this time because of the Change Programme debacle and (over the last 2 ½ months) I have wasted hours calling the Tax Office for numerous clients who need help with trying to extract refunds out of the new “System”. It reminds me very much of the Tax Bonus times.
I (and presumably others) need your help in requesting the Commissioner to extend the lodgement programme to take this into account.
3.136 On 14 April 2010, the ATO directly contacted tax practitioners again with another special broadcast:
Refund cheque delays
We have identified an error where some of your clients may have received a notice of assessment without a corresponding statement of account or refund cheque. Due to this error, approximately 140,000 cheques were not printed.
We are fixing the problem and the cheques should be with your clients by the end of next week.63
Questions about ATO accountability and calls for independent scrutiny
3.137 On 14–15 April, the ABC radio program, PM, ran a couple of reports on the Change Program and the problems experienced, including a reference to an internal ATO report that noted the emotive tone of tax practitioner complaints (see for example, a later internal ATO report reproduced in Appendix 9). On 15 April 2010, the Assistant Treasurer announced on the program that he was considering directing the IGT to review the Change Program.64
3.138 On 15 April, the ATO published another update:
Anyone who has not already lodged their 2008-09 tax return, and does so now, should receive their refund or notice of assessment within our normal service standards — 94 per cent of electronically lodged returns within 14 days and 80 percent of paper returns within 42 days.
However, I would like to provide another update on where we are in processing the returns we stockpiled due to our upgrade to the income tax processing system.
63 Australian Taxation Office, email broadcast to tax practitioners, 14 April 2010. 64 Sherry, Nick, Interview with Sabra Lane, PM, ABC Radio, 15 April 2010.
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While we are experiencing some problems which unfortunately are affecting some people in the community we are working as hard as we can to resolve the problems. …
Current issues and what we are doing
Last week we noticed an increase in calls from people who received a notice of assessment and were entitled to a refund, but the cheque was not included. Unfortunately, approximately 140,000 cheques were not printed. They are now being printed and will be with Australia Post by Monday 19 April.
We currently have around 100,000 returns from individuals that we estimate are over 30 days old in our system. Not all of these will generate refunds. In fact, we would anticipate roughly half might generate a refund, where the remainder would be tax bills.
While this is more than we would normally have on hand, it reflects the shorter processing time we have had given the need to stockpile any outstanding 2008-09 returns while we switched over to the new system. We are working hard to be back to normal processing service standards with this work as soon as possible.
The reality is that some cases take longer to process and we would always hold some up for legitimate reasons.
For example, we would not release refunds that appeared to be fraudulent or where people may owe money to the Commonwealth, for example, other agencies such as Centrelink and the Child Support Agency. Sometimes, we also check information reported in tax returns where we find discrepancies or need more information on particular claims.
Of the estimated 100,000, approximately 30,000 returns are in this category.
We understand our upgrade has caused frustration and inconvenience for some people and are doing everything we can to ensure any outstanding returns are processed as soon as possible.
For example, we have brought in an additional 320 people, have extended work shifts and are working as much overtime as is possible. We are in the process of bringing on an additional 500 temporary people over the next few weeks.
We have been working hard to ensure we get refunds to people experiencing genuine financial hardship and to date have helped over 1,440 people. If people are in this situation we ask that they do not hesitate to call us on 13 28 61 and we will do everything we can to help.65
3.139 By 16 April 2010, many tax practitioners were frustrated with the perceived level of ATO accountability.
In his ATO Web site update of last night Second Commissioner … provided “the facts” about the ATO's computer upgrade which included comments such as “the system is
65 Australian Taxation Office, Processing status of stockpiled tax returns - latest update 15 April, available from www.ato.gov.au.
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working well” sitting beside comments saying that you and me (the Australian taxpayer) are paying for an extra 820 people to come in and fix the system that is working well.
He says the reasons for the delays are due to Centrelink, due to tax debts owing by taxpayers; due to people lodging multiple years of returns and finally due to taxpayers and presumably Tax Agents lodging returns full of errors — for some reason there is no mention of the delays being an ATO problem at all.
3.140 Some tax practitioners also called for compensation as a means to impose a higher level of accountability.
Can you also raise the issue of why taxpayers only receive a reduced rate of interest from the ATO as opposed to the GIC or shortfall rate the ATO charges. The majority of my business clients would be using overdraft facilities etc to operate their business + personal affairs & hence the interest rate they have been charged re delay in receiving refunds is significantly higher than the corresponding interest they have (or are yet to) receive from the ATO. Really there is no justifiable reason for such double standards in today’s environment.
I understand that one argument the ATO puts forward for the justification in the difference of the rates is that taxpayers should be encouraged to pay their tax bills & hence a higher rate is charged. However, conversely, the argument applies to the ATO in that they should be encouraged to perform their jobs efficiently & if they can’t & cause delays in processing client refunds (for whatever reason) then compensation in the form of at least commercially realistic rates of interest should be paid to the taxpayer.
Given the ATO unbelievable ineptitude together with a reluctance to publicly admit their errors and lack of display of any empathy … over this long running saga, then surely they need to be encouraged to ensure such errors do not occur in the future by being made to pay a commercially realistic interest from now on in. If this requires legislative change so be it.
The ATO’s silence has perpetuated the belief that their processing & other delays have been the tax agents fault rather than the ATO. Us tax agents are bearing the administrative cost of replying to taxpayers queries rather than the ATO. We are not being paid for this yet no doubt the ATO managers / employees are. Thus the question of should the ATO compensate tax agents for the unpaid time we have spent due to their errors needs to be raised as well!
…
Two matters that need to be emphasised apart from financial loss is the emotional strain placed on work colleagues and serious loss of credibility with clients which will impact on my client base this coming financial year.
3.141 By 16 April 2010, tax practitioners noticed more errors with the date due for payments on NOAs:
We recently lodged a number of tax returns for clients and had advised them that their due date for payment of outstanding tax was to be 5 June 2010 (based on notification from ATO of due dates for payment when lodgment was made by certain dates).
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Assessment notices were then issued by the ATO for these customers and detailed a payment due date of 21 April 2010 (directly against their previously published advice). [Note that this date due for payment is different to the error referred to in the ATO’s 1 April 2010 email to tax practitioners — set out above] One of my team then spent 40 minutes on the phone to them regarding the date for payment during which the ATO confirmed that the due date should be 5 June but have “refused to confirm” what date the customer should actually pay the assessed amount. They have escalated the situation but that will take our clients over the date due for payment as detailed in the erroneous assessment notices.
This is an absolute debacle as our clients have budgeted to pay their tax payables in June and the ATO appears to have arbitrarily changed the dates — this is placing our clients in an invidious cash flow position. By effectively shortening the payment period by 7.5 weeks with no reason, they are creating difficulties which should not exist.
I know what will happen — for each and every client affected, we will need to get on the phone to the ATO and argue the case regarding payment dates which will take about 1 hour per client. Who is going to pay for this?
3.142 On 16 April 2010, senior ATO staff briefed the Assistant Treasurer and, on 19 April 2009, the Assistant Treasurer directed the IGT to review the Change Program with broad ranging terms of reference.
3.143 On 19 April 2010, senior ATO officers briefed the CEOs of the tax professional bodies and industry associations on the Change Program. The Minutes report that the ATO advised the attendees, among other things, that:
… there have been two issues which had caused the majority of concern:
1) Data provided to Centrelink was incorrect and 2) Cheques not included with NOA. These two issues ultimately caused bigger delays than first thought and both were due to human error.
The system itself has been extensively tested and was working as it should. The problem was caused by the work we had put into it, as well as the staff getting used to running a new system. The second issue was due to cheques not being printed, this has been rectified and the cheques will be with Australia Post this afternoon.
The system upgrade has been the largest system update. [The ATO] reiterated that the ATO has now processed 2 million items through the new system of which close to 900,000 were refunds, the ATO is confident it is working well. There have been some delays, we don’t deny, however the crucial aim is to get refunds out.
[The ATO] recognised there was pressure on Tax Practitioners regarding delayed refunds but also in relation to May lodgments. This is not yet been announced however it has been decided to not apply FTL penalty for May lodgments.
[In response to a question regarding whether there were any other issues of significance that the ATO was aware of which would potentially cause major concerns in the next few weeks]. [The ATO] advised that there was nothing we were aware of at this stage, staff are getting used to the system. The new system was built to support Taxtime 2010 and we
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are very advanced with this process and it is still tracking green which raises confidence. ABR is running more effectively and we are confirming that other future deployments scheduled to occur, for instance AusKey, does not impact on other systems like the portal. [The ATO] advised that [there is an ATO internal] meeting every morning tracking the progress carefully, this meeting now occurs twice a week. If we didn’t have the two human errors situations, we would be more confident.
3.144 On 20 April, the ATO published another update:
Last week we said there were 140,000 delayed refund cheques which were being printed. I would like to provide a brief update on those cheques.
Some people will have already received their cheque and we can confirm the balance are in the process of distribution with Australia Post.
We have also issued another 74,000 refunds directly to bank accounts or via cheque since Friday last week. Overall we have sent 898,000 refunds to people and businesses.66
3.145 By 20 April 2010, tax practitioners were noticing that the ATO was providing incorrect information to the Child Support Agency, which affected payments, and had cancelled the issue of numbers of Business Activity Statements. They observed that these problems imposed unrecoverable costs on tax practitioners.
The ATO have thus far been incredibly negligent in their actions. To issue a press release stating that 140,000 refunds cheques did not issue is one thing but to now have them lobbing into my office dated 1 April and post marked 19 April is a disgrace. I now have to phone every affected client to explain to them that I have not been sitting on their refund cheque for almost 3 weeks. The client gets no interest paid by the ATO as the system places it in their account dated 1 April, I even have one here that the client was charged $9 of interest somehow then this was remitted by the ATO (how generous) despite a refund cheque being owed.
On top of this I am expected to somehow attend to my own personal tax return and have that lodged on time.
Even without the cost of potentially losing client, I would estimate the extra work involved mopping up the ATO mess to us at around $50 a client at least (this is at cost not at charge out rates). Multiply this by the hundred or so that a firm our size has affected by this and the damage is around $5k at cost or closer to $15k at charge out value lost.
…
Not only have we had to organise additional finance to survive which has been exhausted we are faced with Clients contacting the ATO to change address so refund goes to them although we had a signed agreement for their fees to come from their refund. Now we have additional costs to chase our debt and are unable to get a copy of
66 Australian Taxation Office, Processing status of stockpiled tax returns - latest update 20 April, available from www.ato.gov.au.
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the assessment notice for our records. The ATO should not change addresses when returns are issued by Accountants and Tax Agents.
We have spent unproductive time chasing returns, refunds, assessment notices and when returns would be processed as they appear as not lodged on the portal but were lodged months ago. Some days we spend 2 — 3 hrs on the phone to the ATO.
It takes a week for assessments to be issued after the refund has hit our trust account. We have to manually work through lodgements to work out who the refund belongs too then incur additional costs in sending out the assessment notice when received a week later. We do this as we feel clients have waited long enough for the refund a week later also breaches our guidelines issued by the NIA [National Institute of Accountants] which is 24 hrs.
The new assessment notice is causing problems and having to spend hours explaining to clients what is means. Explaining to finance companies that this is the new assessment notices. The new notice opens up to fraud. As where is their name or TFN [tax file number] on each page. How does the finance company know who earnt what?
If pages get mixed up in the sheet feeder on the copies who does it belong too?
Plus more pages for us to copy and additional postage to send out a larger envelope to take the additional pages.
The majority of people want the old one page assessment back.
The cost in phone calls alone has gone up along with postage and stationery costs.
What a burden to place on small business especially in this difficult financial climate. Did we not suffer enough last year with the additional costs labour to hand out all the bonus cheques that were sent via Accountants and Tax Agents and as instructed by the ATO at no cost to anyone but us poor bastards the Accountants. Who said become an Accountant great job and you would make money. Its only cost me quality of life and money.
3.146 On 22 April 2010, senior ATO officials appeared before the Joint Committee for Parliamentary Accounts and Audit. Amongst other evidence given at this hearing, the following was provided:
Ms LEY—… is it not the case that the IT [income tax] module of the existing system has cost $400 million and that it is not working particularly well at the moment; although, we note that it may at some point in the future? That is half the total budget of the change program. …
Mr D’Ascenzo—We are starting from a proposition that the IT integrated system is quite a significant achievement in where we are at. Any systems changes of that order would require a range of issues in terms of their bedding down. A lot of the issues associated with people indicating delays were advised to tax agents before Christmas. We said: ‘We have to close the system down. This is not the system not working. This is closing down the system while we convert.’ Some people heard that, and some people did not, or chose not to, act on it. We had a five per cent spike in terms of increased claims for refunds
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before December. That was probably not as high as it could have been to try to lessen the impact later on in the year.
Issues of bedding down are of a level that I do not think you can justifiably say that the system is not working. The system is working very well. I am sure that if you get expert opinion about the complexity of what an implementation of this size means and the sorts of issues we have had, you will see that they are the sorts of issues that you would expect from this sort of implementation. I was very concerned with the conversion in January because, if the conversion failed, that would be the system not working, and that would be quite catastrophic in the scheme of things. We have not had that catastrophic failure. We have had expected delays while we implement the new system. We have had, I think, two glitches that have impacted on that. …67
Mr Butler … [the first glitch occurred] on 9 March [when] we identified an issue that unfortunately did take us longer than we thought—it took us almost two weeks to fix that and be very confident that it was not going to occur again. …
It was complex. It was difficult. We had returns part way through the system. We had to back them out, put the fix in place and thoroughly test that it was not going to cause any more problems. We told the community about that particular issue on 15 March, on our online update—that there was this problem which delayed us. We resumed processing on 23 March. …
The 140,000 [the second glitch] occurred after that. The assessment went out, but there should have been a statement of account with a cheque. So those are the two issues that happened which have caused delays. As I said earlier this morning, we are very confident that the calculations are correct in the assessments—which is very important, of course, for a tax administration. I guess the environment that we were in was one where, as the commissioner alluded to, there was an increase in the filing of returns before Christmas, though it was not substantial. Tax agents are quite used to getting refunds on electronic returns within two or three days, although our service standard is 14 days. We could not process returns for six weeks and then another two weeks—we had, effectively, eight weeks in which we could not process returns. There have been four months since Christmas, and during the two months we could process them we have tried to do four months’ work. We have worked very, very hard to catch up.
CHAIR—For us, representing the people of Australia, you may have tried to warn your tax agents and the taxation community that there could be delays, but that does not mean that they would have absorbed that. There is always planning around getting that tax return back, whether it is by a small business, an individual or the agents who depend on that for their income. So there will be genuine hardship cases. Could you tell us what you are doing to assist in that matter?
Mr Butler—We have been quite overt from early March about what we would do. We actually caught up with the processing at the end of February. So we were very pleased, but we had this one problem and lost two weeks. Right from that point, we made it very clear what we would [do] around hardship. We have produced some refunds in
67 Joint Committee of Public Accounts and Audit, Reference: Auditor-General’s reports Nos 4 to 21 (2009–10), Proof Committee Hansard, 22 April 2010, Canberra, p. 7.
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1½ hours from the time someone raised a concern with us. We have had agents approach us who might have been waiting on assessments. We have checked those thoroughly and processed returns as quickly as we can. We have just over 3,800 cases processed as hardship. It is not a long period since we started processing on 22 March. People ring us and say that they need the money quickly. We can tell from the system that the refund might go out on, say, next Monday, or something like that, and they have chosen to wait for that. In strict cases we have applied the criteria very openly. We have basically said, ‘If you need the money, tell us and we will do everything possible to get you the refund.’68
3.147 On 23 April 2010, the ATO met with a number of key tax profession representative bodies. IGT staff also attended. At this meeting the ATO advised that ‘the code, to our knowledge, is not giving rise to errors’ and that it was not aware that it had issued any incorrect assessments (apart from those involving operator errors — for example, those processed manually). It explained that there were unavoidable delays because returns were held until the ATO was sure that the assessments were right. It explained that, but for two key errors (the ‘glitches’ referred to above — the ATO’s explanation of these two key errors is set out in Appendix 10), every delay now is due to a valid reason. The ATO considered that it would take 12 to 18 months to ‘bed the system down’ and kept key Accenture and ATO staff on.
3.148 The ATO also commented that it had relaxed its ‘hardship’ process to allow those experiencing cash flow problems to receive refunds through the manual processing processes. In some cases, this has allowed people to receive refunds within one and a half hours.
3.149 The ATO also explained that it was reluctant to communicate problems unless it was confident of the diagnosis of the problem. However, the tax profession representatives argued that the ATO needs to give reasons to tax practitioners so that they do not waste time following it up with the ATO.
3.150 At this meeting, the bodies identified five broad impacts on taxpayers and tax practitioners. These impacts are discussed in more detail below.
3.151 Many taxpayers also complained to the Commonwealth Ombudsman. By the end of May 2010, the Ombudsman had received around 220 complaints. The main types of complaints include:
delays in receiving expected refunds
delays in receiving superannuation co-contribution payments
delays in receiving a replacement tax file number (TFN) (where the TFN had been compromised)
government benefits delayed/changed due to information from the ATO not being received by Centrelink
68 Joint Committee of Public Accounts and Audit, Reference: Biannual hearing with Commissioner of Taxation, Proof Committee Hansard, 22 April 2010, Canberra, pp. 4-5.
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inadequate communication from the ATO
inadequate responses by the ATO when a complaint has been made.
RECONCILIATION OF THE MAIN PROBLEMS ENCOUNTERED BY THE ATO
WITH THE ATO’S PUBLIC COMMUNICATIONS
3.152 Many tax practitioners were concerned that the ATO’s communications did not reflect their experience of what was happening. Some considered that the ATO was not telling the whole story:
I normally do not comment on ATO efficiency as I feel it can be counterproductive. The ATO it seems is ironing out bugs in its new system and once that is done I'm sure that it will work well. But it seems to me that the ATO is not keeping the public informed about late Notice of Assessments. This office is being run off its feet taking client calls about notices of assessment & refunds and then having to ring the ATO to get the standard response that it has been issued & should be here in 1-2 weeks. Then the call to the client to explain.
The ATO should be proactive in advising the public about the lateness of its assessments at the moment and not just spruiking about how many it has issued.
3.153 A discussion of the main problems follows below. However, a reconciliation of the ATO-identified major problems (up to 3 May 2010) and ATO’s external communications is provided in Appendix 11. The IGT’s observations of those communications are set out in Chapter 4.
ATO EXPERIENCE OF PROBLEMS OVER FEBRUARY — JUNE 2010
3.154 The ATO was aware of a number of problems or defects with the income tax release from the ‘go live’ date. The ATO worked hard with Accenture to fix these problems and considered that it could cope with the rate of defects.
3.155 However, on 18 March 2010, Accenture reported to the ATO a sudden increase in defects as a result of the ‘big ramp up process’. These defects, amongst other things, contributed to the delays in issuing NOAs.
Significant problems impacting on taxpayers and tax practitioners
3.156 At 30 June 2010, more than 4500 problems had been raised through the ATO’s internal escalation process. However, many of these problems did not impact on taxpayers and tax practitioners directly or were not defects with the systems themselves (such as problems with the ATO’s procedures for the new systems).
3.157 The IGT has examined the ATO’s records up to 3 May 2010. Up to this point in time, the most significant problems with impact on taxpayers and tax practitioners were:
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Income tax returns in error queues
Fatal form definition facility errors
Electronic Lodgement Service reporting for tax practitioners not available
Problems with amendment processing
Extended delays in resolving High Risk Refund (HRR) review items
Data transfer from the integrated core processing system (ICP) to the tax return database (TRDB) impacting on pay as you go (PAYG) instalments
Low income tax offset and non residents
Payment greater than liability review item
Delays with assigning new TFNs where these were feared compromised
SOA/NOA incorrect Electronic Funds transfer (EFT)/cheque advice
NOAs issued but SOAs with attached cheques were cancelled
Taxable income on the NOA incorrectly displayed a zero (the ’result of this notice’ calculation is correct)
Higher Education Loan Accounts (HELA) correspondence issues
Problems with Child Support Agency (CSA) data exchange and debts
Problems with Centrelink data exchange and debts
Superannuation co-contributions
Incorrect diversion of interactive voice response (IVR) calls — where’s my refund self help
Verify super income tax offset
Incorrect information on Notices of Amended Assessment — previous taxable income shown as $0.00, and impacts Interest on Overpayments (IOP) calculations
Suspense items contributing to delays in assessing returns and issuing NOAs.
3.158 These problems are explained in more detail in Appendix 11.
Delays in ATO issuing taxpayer Notices of Assessment (NOAs)
3.159 Overall, from the date of the income tax release deployment until 30 June 2010, around 3.87 million tax returns were lodged (compared with around 4.14 million
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lodged for the same period in 2008)69 and around 145,000 tax returns were on hand at 30 June 2010 (compared with around 217,000 as at 30 June 2008).
3.160 Of the 3.87 million income tax return forms lodged, it is not known how many were assessed and NOAs issued within the ATO’s service standard of 14 days of the tax return being lodged or the income tax release’s deployment. However, the ATO has advised that of the individual’s lodging tax returns, around 2.4 million were lodged over this period, with about 1.3 million (around 54 per cent) being processed and NOAs issued within the 14-day service standard. A monthly break up of the ATO’s performance in issuing individual NOAs within its service standard is provided in Appendix 12. It is unknown, however, how much of this delay is attributable to the period in which tax returns were stockpiled.
3.161 It is also not known in relation to these delayed returns, what proportion of the period of delay was attributable to the problems that the ATO encountered. The ATO advises the IGT that it is unable, at this point in time, to collate this information. The ATO has also told the IGT that it does not plan to collate this information for returns lodged prior to 1 July 2010.
3.162 Therefore, it is impossible to ascertain the exact extent of delays experienced and the proportion of the lodgement population affected.
3.163 It is also unknown what proportion of these tax returns was relatively simple in nature (for example, salary and wage earners with minimal deductions/tax offsets).
A number of problems giving rise to large numbers of suspended forms, review items and returns held in the safety net
3.164 A proportion of the delayed NOAs were due to income tax returns being suspended in the system, being held up due to review items or in the safety net, and other related issues. Although, a certain degree of suspensions are expected as part of the normal operation of the systems, and similar functionality (such as exceptions and error codes) were a feature of the ATO’s pre-existing systems, these contributed to the overall delays experienced in processing returns.
3.165 As at 30 June 2010, around 10 million ‘forms’ were created in ICP since the income tax release’s deployment. A ‘form’ is a term that includes non-tax return forms (such as payments). Forms were suspended approximately 728,500 times.
3.166 The ICP system also generated approximately 350,000 review items for ATO staff action. The total figures may also include multiple suspensions and review items for the same tax returns.
3.167 These total figures only broadly indicate the potential number of delayed returns because any one return could be subject to many suspensions and/or review items. However, the total figures do reasonably indicate the workload for ATO staff.
69 Note, 2009 figures are not used because of the distortionary effect that the tax bonus had on income tax lodgements in 2009.
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3.168 Details of problems adversely affecting taxpayers and tax practitioners are set out in Appendix 11. For example, problems with the data transfers between the ATO and Centrelink and the Child Support Agency also contributed to delays in relation to thousands of cases and millions of dollars in refunds. Further, many thousands of returns were held in errors queues because the ICP system could not recognise the form.
3.169 There were a number of contributing factors which impacted on workloads, having a flow on effect to delays in issuing NOAs and dealing with taxpayers. This required the ATO to employ extra staff, to redeploy other officers from other areas to deal with the problems and to extend the hours of staff to get through peak workloads quicker. During April 2010 staff numbers working on processing tasks was at its peak.
3.170 Over the February–June 2010 period, the safety net held over 180,000 income tax returns for a number of different reasons. This was higher than the 50,000 individual assessments estimated by Aquitaine, in its advice to the ATO at the time of deciding whether to ‘go live’, to be impacted by the assessment defects. By mid March, 117,500 returns had been released from the safety net. By 9 April 2010, a further 29,000 had been released and by mid-May a further 31,000 had been released. As at the date of drafting this report, 11,000 remain held in the safety net. The following table sets out the types of returns held by the safety net and the periods for which they were held there.
Safety net holdings
Date held Date released Line of Business Volumes
1/3/2010 8/5/2010 Shortfall Interest Charge (SIC) 18,000
11/2/2010 17/3/2010 Baby Bonus 4
11/2/2010 17/3/2010 Entrepreneurs Tax Offset (ETO) 48,500
21/2/2010 17/3/2010 Primary Production Averaging 69,000
2/3/2010 31/3/2010 Exempt Foreign Employment Income 1,800
13/3/2010 31/3/2010 Special Professional Averaging 1,300
6/3/2010 9/4/2010 Employment Termination Payments/ Superannuation Lump Sum Payments
26,000
21/3/2010 14/5/2010 Non Resident Withholding Tax 13,000
28/4/2010 n/a Super Income Tax Offset 11,000 Source: CPT Global, Release 3 — Income Tax Implementation Review, report to the Australian Taxation Office, August 2010, p. 30.
Initial ATO reporting inadequate to properly understand processing problems or deploy resources effectively
3.171 The ATO has advised the IGT that the systems reporting which was available immediately following deployment, and the ATO’s understanding of the data that the ICP system was providing, impeded the ATO’s initial ability to quickly deploy resources to areas of greatest need.
3.172 For example, at one point the ATO was concerned with the increasing numbers of particular types of review items. It deployed significant numbers of staff working overtime to resolve these review items. Managers were aware that thousands
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had been resolved. However, the subsequent reports appeared to show that these resources had not been effective in reducing numbers. After some investigation, the ATO realised that the time at which a review item was raised by the system and resolved by the staff would affect whether the system subsequently re-raised the same review item. Once this was understood, the ATO was able to develop an effective work around (i.e advising staff to wait 24 hours before telling the system that the particular case had been resolved).
3.173 For the income tax release, only the critical transactional reporting functionality to enable the ATO to operate was developed. The ATO advises that in the lead up to deployment, the ATO did not want to divert resources to developing management reporting which may not give the right sort of information needed. It decided to wait until it developed an understanding of the system in production and how the data was different to the ATO’s pre-existing legacy systems so that it could properly build its reporting. This was based on the ATO’s experience with developing management reporting in Release 2. In relation to the income tax release, the reporting facility was deliberately delayed because all resources were being used to prepare the release for deployment. Also, some of the reporting functionality may have fallen outside of the contract with Accenture and therefore required extra ATO expenditure.
ATO systems problems preventing timely completion of High Risk Refund (HRR) work
3.174 The ATO also noticed that the system was assigning large numbers of forms for high risk refund review (HRR). These forms were effectively suppressed from moving forward through the system until the compliance risk (that is, risk of unsustainable deduction, refund, etc.) was reviewed by an ATO officer.
3.175 As at 6 June 2010, just over 27,500 returns had been selected for HRR under the new system.70 Of these, the ATO had completed HRR review in just under 20,000 cases, with just over 6500 taking more than 28 days from the date of being flagged for review to being completed and allowed to continue in the system. Of the approximate 8000 cases on hand as at 6 June 2010, just over 2400 were more than 28 days old of being flagged for review.
3.176 The ATO advises that on closer inspection, many of these returns were not awaiting information from taxpayers or being reviewed by officers; they were prevented from being resolved because of other systems problems, such as amendment cases or shipping and entertainers’ returns. Stops and starts in the upstream flows of returns also accentuated the peaks and troughs of workloads for ATO staff in the HRR area.
70 Note that as at the shutdown of the legacy systems, over 8800 high risk refund cases were in the system. Of these cases around 4000 were being reviewed for fraud, resulting in around 3700 cases being cancelled or allocated for potential prosecution.
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ATO staff diverted from their work to answer telephones
3.177 As part of the contingency plan, the ATO deployed 1200 staff to process forms and handle phone calls. These included staff from other areas (such as the debt and processing area) and temporary staff that the ATO employed as part of its normal Tax Time activities.
3.178 Some frontline staff were experiencing increased stress in dealing with enquiries and complaints as a result of the reduced level of service to taxpayers and tax practitioners. The IGT heard directly from some of these staff that they felt stressed when being asked to tell taxpayers and tax practitioners that their complaint had been escalated and would be dealt with within a certain period of time, when they perceived that nothing would happen within that time period. These ATO officers explained that their perceptions were based on prior experience in which they would escalate a case, see the relevant work item routed to a particular area for action and that work item remain unallocated for substantial periods of time.
3.179 The ICP system was also unavailable for periods of time, which contributed to an intermittent inability to process work.
3.180 ATO staff also experienced impacts in other areas of the Change Program, such as those related to the Case Management System.
ATO audit trail issues as a result of changes to the posting of payments
3.181 The IGT has been advised that most of the payment processing is operating effectively, in certain circumstances. However, the ledgers for the new system do not record the total amounts paid by taxpayers in an easy to follow format. This increases the risk of reconciliation errors and workloads for ATO revenue accounting staff. For example, where one aggregated taxpayer payment is made by cheque for a number of tax liabilities, the new system will not record the face value of the cheque. It will only record the subtotals that are attributable to each tax liability on separate accounts. Furthermore, there is no visible trail to record which payment is transferred to which account, although there are logs that provide this information. This can increase the risk of potential ATO officer fraud.
Manual ATO processing used to minimise impacts
3.182 Manual processing of an income tax return is carried out by the Client Account Services (CAS) area within the ATO’s Operations Sub Plan.
3.183 In previous years, the ATO had around four FTE people manually processing hardship cases. From January 2010, the ATO employed 15 people as a contingency plan for the December/January shutdown. The number of staff was increased through February to around 200 people in April, with many working extended hours and substantial overtime. As at 27 May 2010, the ATO had around 7000 hardship cases to process.
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3.184 In addition to the post-deployment problem mitigation mechanisms (set out above), the ATO took action to manually process income tax returns and payments. Primarily this work focussed on those taxpayers and tax practitioners who claimed financial hardship. Although the ATO’s criteria for claiming financial hardship involved a level of proof of that hardship, from mid-April 2010, the ATO substantially relaxed that standard until July 2010. Effectively during this period a taxpayer or tax practitioner only had to mention the term ‘financial hardship’ and the return would be manually processed. From 28 April 2010 and 5 May 2010, the ATO allowed people to lodge these applications electronically on the tax agents’ portal and ATO website, respectively.
3.185 Processing a return manually is a resource intensive and time consuming exercise. Firstly, an officer must obtain the information that was lodged and electronically captured from systems upstream of the ICP system. The officer must then manually input that information into pre-existing legacy systems and rely on it to provide an assessment based on the information provided on the return form. The electronic print out of this assessment is attached to the Case Management System as a record of the manual assessment.
3.186 The officer then must run the assessment through a stand-alone system which replicates the ATO’s risk filters in the ICP system. This stand-alone system was created by CAS staff as an interim measure pending the resolution of problems with the ICP system. If the stand-alone system flags the return for further inquiry then the officer must send an email to an officer in the HRR area for action and await the response before issuing a NOA. If there is no such flag, then the officer sends emails to the Higher Education Contributions Scheme/Higher Education Loan Program, Superannuation and CAS accounting people in the ATO requested them to check whether there is an outstanding debt linked to the taxpayer. Depending on the responses received, adjustments to the assessment are then made.
3.187 The officer then prepares the NOA by manually typing the figures on the NOA into an electronic template (a Microsoft Word document). Another officer must double check that this is done accurately. Following this double-check, the ATO officer must go onto the ICP system and post the total amount on the NOA as a ‘sundry item’ on the taxpayer’s account. This posting is made at this stage because the ICP system has not processed the tax return on the system. If the total amount of the NOA is a refund due to the taxpayer, the case is referred to another ATO officer for approval to disperse monies. Once approved, a hardcopy cheque is manually prepared on another system. The cheque is then printed and is either sent in the post to the taxpayer, or, if the taxpayer requested an EFT transfer, it is physically taken by the ATO to the Reserve Bank. From 12 April 2010, the Reserve Bank had agreed to clear the cheque and transmit to the taxpayer’s bank overnight. This reduced the time taken for the cheque to clear by a number of days.
3.188 The above manual process can involve more work if there are multiple returns or matters of complexity (such as income averaging).
3.189 After the refund is issued, the ATO will need to complete remedial work in the future to update the new systems to reflect the manual assessment, payment and correspondence. This remedial work is not expected to take place until after October
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2010. The ATO is awaiting systems fixes so that it can re-run the income tax return through the ICP system to update the systems with the correct postings data. The ATO has deferred this work until after October 2010. Unless, the systems are able to automate this process, staff will be required to manually populate all the required fields on the system — a considerable resource intensive exercise.
TAX PRACTITIONER CALLS FOR REPARATION AND THE ATO’S RESPONSE
3.190 As noted above, tax professional bodies had approached the ATO about the problems and delays experienced. The ATO had received around 15,000 tax practitioner complaints from 1 March until 31 May 2010 and 3600 taxpayer complaints.
3.191 Tax practitioners, both individually and through representative bodies, have called for various ATO actions as a means to remedy the adverse impacts they suffered. These actions were clearly expressed during a 23 April 2010 meeting with the ATO and include the following.
ATO public apology
3.192 Tax practitioners argued that a combination of the ATO’s delays and communication had damaged their reputation with many of their clients. This was because they were of the view that the ATO communications appeared to imply that the tax practitioner was the cause of the delays and errors.
3.193 Typically, taxpayers would ask their tax practitioner about the progress of their returns and the tax practitioners would respond that they had followed this up with the ATO, but because of problems with the new systems it was still being processed. Some taxpayers would compare this explanation with the ATO’s public messages that all the backlog had been processed. Some would also call the ATO and, in some circumstances, be told that the return had not been lodged.
3.194 In relation to the problem where SOAs had been cancelled (to which the refund cheque was attached), the taxpayer received their refund cheques around three weeks after the date on the face of the cheque. Many taxpayers were left with the impression that the tax practitioner had been tardy in forwarding their cheque.
3.195 The relationship between tax practitioner and taxpayer is generally one of trust. The tax practitioner holds themselves out to be knowledgeable and to act in the best interests of their client taxpayers. Inherent in this trust is that lodgements and payments are made when the tax practitioners say they have been.
3.196 Tax practitioners wanted the Commissioner to issue a letter explaining the problems and stating that the tax practitioner was not to blame. Tax practitioners wanted a public apology.
3.197 On 29 April 2010, the Commissioner published an open letter on the ATO website which included the following apology.
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The introduction of our new income tax processing system has inevitably impacted both taxpayers and tax agents. I apologise if you waited longer than usual for your notice of assessment and/or refund.
I would like to especially thank tax agents for their patience and support while we completed this essential work. Without knowing each individual circumstance, I am not aware of situations where agents have been holding things up. Rather, they have been working with us to ensure the impacts on their clients have been minimised.
If you are due a refund and we have taken longer than 30 days since your return was lodged to issue a notice of assessment, you are entitled to interest.71
Improved quality and timeliness of ATO communications
3.198 Tax practitioners expressed concern that the type, timing and currency of information published by the ATO on known problems with the new system did not allow tax practitioners to take action to minimise the adverse effects of these problems on their business or their clients.
3.199 They asked that the ATO publish a complete list of current issues impacting on taxpayers and tax practitioners (as understood by taxpayers and tax practitioners) that the ATO was aware of, the method the ATO would take in fixing the identified issues and a date by which the ATO either expects to have implemented a fix or the date for a further update on the status. They pointed to a number of instances where information was published too late to help stop tax practitioners wasting time in working out what the problem could be and discussing this with ATO call centre staff (sometimes many times and for prolonged periods).
3.200 On 25 May 2010, the ATO published a list of some problems with the system. The ATO provided an update of known problems and expected resolution dates on 25 August 2010.
Extensions of time to lodge and pay
3.201 Tax practitioner representatives also argued that smaller tax practitioners should receive a blanket extension to lodge until 21 June 2010 for income tax returns and activity statements. They argued that many weeks of tax practitioners’ time had been taken up to chase up months of delayed returns and other problems with the system. This was compounded by the unavailability of the tax agents’ portal for periods of time. As such, they had been unable to devote much time to preparing for upcoming lodgement obligations.
3.202 Tax practitioner representatives also argued for a blanket extension on times to pay tax debts if clients were waiting on a large refund.
71 Australian Taxation Office, Message from the Commissioner of Taxation, 29 April 2010, available from www.ato.gov.au.
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3.203 On 4 May 2010, the ATO agreed to a blanket one-week extension for certain types of lodgement obligations.
The Commissioner has granted a general lodgment deferral for all 2009 individual and trust income tax returns due to be lodged by 15 May to 22 May 2010. Payment (if required) will be due as per the notice of assessment.
5 June lodgment program concession date for individual income tax returns
In the Lodgment Program 2009–10, individuals and trusts who are due to lodge by 15 May are able to lodge by 5 June without penalty, provided that any payment due is also made by this date.
As the 15 May lodgment due date has been extended, the concessional lodgment date of 5 June has also been extended to 12 June 2010 for lodgment and payment.72
Compensation for unproductive tax practitioner work
3.204 Tax practitioners also argued that although taxpayers may be compensated for delays in receiving refunds, tax practitioners were not compensated for the adverse impacts of these delays. They argued that compensation should be paid on the basis of two main grounds:
for unproductive work in unnecessarily chasing the progress of delayed returns due to a combination of the system’s problems and the ATO’s communications
the adverse impacts of reduced expected cash flows.
3.205 Tax practitioners argue that the ATO’s communications did not alert tax practitioners to the potential for delays occurring after 1 March 2010. In support, they point to the ATO’s communications occurring before and after the deployment of the income tax release. This, they argued, did not alert them to take action to minimise the adverse impacts of potential extended delays.
3.206 In relation to reduced cash flows, some tax practitioners have a business model which pays their client taxpayers the expected refund within a period of time —for example 48 hours. Generally, these tax practitioners pay their clients out of their own business funds after conducting a number of checks (such as whether other Government departments are seeking to garnish any expected refund for those clients). In this business model, the tax practitioner accepts the risk for the cost of money between the time it is paid to their client to the time that it is received from the ATO. The ATO has a public service standard of issuing NOAs within 14 days of a tax return’s electronic lodgement in 94 per cent of cases. The general tax practitioner experience has been that tax returns involving relatively simple affairs and conservative claims have been issued within 3–5 days of electronic lodgement.
72 Australian Taxation Office, General lodgment deferral for 15 May individual and trust income tax returns to 22 May 2010, 4 May 2010, available from www.ato.gov.au.
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3.207 The tax professional representative bodies argued that compensation should be initiated by the ATO, as requiring tax practitioners to lodge claims for compensation would exacerbate the adverse impacts they had suffered. They argued that this compensation should be based on an agreed set of factors including the number of tax practitioners’ clients, and that they should be involved in the process to ensure the right factors are taken into account.
3.208 They pointed to the Commonwealth Ombudsman’s Compensation for detriment caused by defective administration — Fact Sheet 973, which specifically states as a common example of a payment under the Scheme for Compensation for Detriment caused by Defective Administration (the CDDA Scheme) being made where a ‘person incurs expenses or loses eligibility for a benefit because … a computer error results in a delayed payment’. The Fact Sheet also states that avoiding a legalistic approach is best practice as the agency should consider the claim ‘from the perspective of a moral obligation and should not involve a compensation minimisation approach’.
3.209 The ATO had, by 31 August 2010, received 80 claims for compensation from taxpayers and tax practitioners. The ATO considered compensation claims received on a case by case basis. However, it decided against initiating steps to provide a process for compensation in the manner requested by tax practitioners:
As is ATO normal practice, if there are tax agents (and taxpayers) who wish to lodge a claim for compensation, they are able to do so. Each claim will be considered on its merits. However, it will be for the claimant, in their circumstances, to demonstrate how the ATO’s actions in implementing the Change Program are defective.74
3.210 The ATO has declined providing compensation because it has decided that there has been no defective administration, as outlined below in the ATO’s formal response:
Has there been defective administration by the Tax Office?
26. The answer to this is no.
27. The implementation of the Tax Office’s new system is a major upgrade, involving the transfer of a significant amount of data and complex systems. There have been no critical systems problems, and overall it is working well. A considerable number of returns have been processed and refunds have been paid.
28. We have accepted that there have been processing delays brought about by the implementation of our new system, but we do not consider that our actions in managing this implementation give rise to compensation. The Tax Office remains committed to ensure the reliability of our processes and the integrity of our information, even if this slows down the implementation and processing times overall. Given the magnitude of the systems overhaul, we do not consider that the consequential delays in the processing of returns, activity statements and related documents were either unreasonable or
73 Commonwealth Ombudsman’s Compensation for detriment caused by defective administration - Fact Sheet, Canberra, February 2010.
74 Australian Taxation Office, correspondence to the IGT, 23 September 2010, p. 3.
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avoidable. Specifically, we do not consider that the time taken to implement our Change program and process tax returns amounts to defective administration within the meaning of the CDDA scheme.
29. In determining whether there has been defective administration, the test is not what would or should have occurred in a perfect world, but what a reasonable person would expect given the same circumstances, same powers and access to resources. The reality is that no implementation of a major computer upgrade of the kind undertaken by the Tax Office could be achieved without some delay or minor processing issues. This had been acknowledged by the Tax Office in its public broadcasts, and the timing of the implementation over the Australia Day long weekend in 2010 was chosen due to the reduced impact on taxpayers and tax agents. Accordingly, the fact that there have been delays and some processing issues does not mean that there is defective administration. The assessment of defective administration must be based on what another reasonable agency could achieve with the same circumstances, powers and resources, and such a comparison would not lead to a conclusion that the Tax Office has been defective or unreasonable in its implementation. …
Should compensation be paid?
33. As we have determined that there has not been any defective administration, there is no basis on which to pay compensation.
34. In relation to taxpayers, if the refund is delayed by more than 30 days after the receipt of the return, then interest is paid under the Taxation (Interest on Overpayments and Early Payments) Act 1983. This is a legislative provision, and is intended to compensate individuals for the fact that they have not been in possession of their money for a period of time. Paragraph 23 of the CDDA scheme stipulates the limitations of the scheme, explaining that the scheme does not apply where there is another legislative or administrative remedy and a further payment would supplement payments set by other specific legislation. As interest is paid pursuant to legislation for delayed refunds, the CDDA scheme should not apply to make a further payment to taxpayers in relation to refunds delayed by the implementation of the Change program. …
37. The compensation claims received from tax agents have sought reimbursement for idle staff and for loss of drawings/cash flow of the agent during the decline in processing of returns in recent months. These losses are not normally the kind that would be considered compensable under the CDDA scheme, as they are not “real” losses. For example, the claim for loss of earnings is not a quantifiable loss until the end of the financial year, and even then it would be difficult for the tax agent to establish that such a loss was caused by the implementation of the Change program and not other factors. The likely scenario is that there may have been a slight decrease in income during the implementation months, but once the returns were being processed, then the money due to the tax agent should have been paid, and should essentially equate to the amount that would have been paid if the implementation had not occurred.
38. Another argument against compensation is that the tax agents have not done all they could to mitigate any loss. It appears that the tax agents who are most disgruntled are those who take their fees from refunds. This is a business model that the tax agent has chosen to apply, and as such they are responsible for any risks associated with that
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strategy, including any delay in refunds being received, for whatever reason. Further, tax agents were on notice that there would be some delay in processing returns, and could have modified their fee structure appropriately, for example, to have sought payment in another manner than via the refund.75
3.211 Taxpayer and tax practitioner claims for compensation were declined by the ATO on the above basis.
3.212 Some tax practitioners asked the Ombudsman to review the ATO’s decision. They received a response that the Ombudsman could not stand in the shoes of the Commissioner in relation to these decisions and could only examine the process taken to arrive at the decision. However, the Ombudsman also commented that:
We also note that the ATO’s apology to tax agents and the community for the inconvenience and frustration caused by the systems delays. However, during the Change Program systems implementation we queried the ATO’s actions to resolve systems problems and communicate with stakeholders about the situations as they arose. In our view the delays you and your clients experienced during the recent systems upgrades in the ATO were unacceptable, notwithstanding that some of the problems that arose may not have been predictable.
We recognise that the ATO attempted to make taxpayers and tax agents aware, through various communication channels, of the impending delays. However, complaints to this office show that these communications were not as effective as they might have been. In many cases delays in refunds and issue of amended assessments extended well beyond the timeframes announced by the ATO. We are also aware of instances of sudden systems errors causing further delays beyond those anticipated and publicly announced.
We have also been critical of the ATO’s communication with this office during the peak period of Change Program implementation. In our submissions to the Inspector-General of Taxation’s review of the ATO’s Change Program we raised our concerns about the ATO’s communication processes, and the impact of the systems delays on both taxpayers and tax professionals.76
Improve the presentation of the Notice of Assessment (NOA) and Statement of Account (SOA)
3.213 Tax practitioners also expressed confusion surrounding the changes to the NOA and SOA.
3.214 The NOA is the cornerstone of the tax administration system because it expresses the ATO’s assessment of tax liability. Various legal rights and obligations arise from this document. The SOA was intended to provide a single account for the various tax accounts that a taxpayer may have.
3.215 The ATO advises that it had consulted with tax professionals on the new design and format of the NOA and SOA. Some tax practitioners, however, have
75 Australian Taxation Office, Internal ATO correspondence, 13 April 2010. 76 Commonwealth Ombudsman, correspondence with complainant, 17 August 2010.
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expressed concern that issues identified in these consultations were not addressed in the NOAs and SOAs that were actually issued.
3.216 The ATO had advised that it will consult again in the future to identify, and then take action to rectify tax practitioners’ concerns.
TAXTIME 2010 (JULY 2010 TO OCTOBER 2010)
3.217 TaxTime comprises the individual income tax lodgement period (July-October) and the work done in preparation of that period by the ATO.
3.218 Heading into TaxTime 2010, the ATO released a document on 28 June 2010 which stated that it expected delays and that it would do its best to issue NOAs within 14 days.
3.219 During late July and early August 2010, some tax practitioners (notably those with business models that offer taxpayers prompt refunds) advised the ATO that they were experiencing processing difficulties again. Compared to previous years, these practitioners were experiencing an approximate 30 per cent drop in numbers of NOAs issuing within 14 days of lodgement.
3.220 From 27 July 2010, the ATO published website updates on a regular basis providing overall numbers of lodgements, NOAs issued and refunds issued. From 20 August 2010, the ATO included figures on what percentage of returns were processed within its service standard periods, which confirmed that delays of more than 14 days were being experienced by a substantial percentage of those who had lodged returns. These updates showed that as at 20 August, 23 per cent of electronically lodged income tax returns were taking more than 14 days to assess and issue NOAs. On 10 September 2010, the ATO provided percentages of returns assessed and NOAs issued within the service standards since 1 July 2010 on a two-weekly basis. The ATO continued to publish updates which showed that service standards for electronically lodged income tax returns were met by mid-August.
3.221 The ATO experienced some problems in relation to e-tax verification (date of birth), returns involving eligible termination payments and Higher Education Loan Accounts correspondence. ATO sent communications on 10 and 13 August to alert people that these problems had been fixed. The ATO also experienced a problem which effectively delayed some returns due to a bottle neck caused by an imposed limit on the numbers of returns that could be input into the pre-existing ‘refunder’ system. Once this problem was identified it was quickly addressed.
3.222 On 25 August 2010, the ATO sent the following communication.
Refunds — For the latest news on refund updates and the progress of income tax returns, read the Commissioner’s online update.
Pre-filling —Dividend transactions — From the week beginning 23 August 2010, 16 million transactions (93% of last year's financial transactions) have been made available.
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Bank interest — From the week beginning 23 August 2010, 18.8 million transactions have been made available.
Known issues
Tax agents have reported some issues to which the following brief updates apply:
HELP [Higher Education Loan Program] and SFSS [Student Financial Supplement Scheme] amendments — We are processing HELP and SFSS returns but a small number of amended returns (less than 2,000) are still being held. We anticipate this issue to be resolved by the end of August.
Payment slips for companies and super funds — We are working to rectify the issue but advise that payment slips can be printed from the portal.
Incorrect lodgment due dates — Companies newly registered in 2010 have an incorrect due date set. The correct due date is 15 May 2010 and we are working to rectify this issue.
Portal related issues
Clients with two or more income tax accounts — Some agents are receiving a message that implies the portal has failed. We are working to rectify access to these accounts by the end of August. If urgent access to these accounts is necessary, phone us on 13 72 86.
Refund requests failing — Some agents are receiving the message 'no financial information details provided'. We are working to have the correct system message display. Agents should stop requesting refunds until the effective date passes.
Client updates not processed — Some client update lists are not yet processed. If an urgent update is necessary, phone us on 13 72 86.77
77 Australian Taxation Office, Tax time update, 25 August 2010, available from www.ato.gov.au.
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CHAPTER 4 — IGT OBSERVATIONS AND RECOMMENDATIONS
4.1 This report has focused on the ATO’s income tax release and other areas of the Change Program in so far as they relate to the income tax release. For the reasons outlined in the IGT submission guidelines, a staged approach has been adopted for this review, and as a consequence, the IGT has only sought to address matters within that scope. However, during the review some matters outside this scope did arise and where appropriate these have been identified for further review consideration.
4.2 Overall, the Change Program was an ambitious and far-reaching project that aimed to deliver a range of significant capabilities designed to improve tax administration into the future. Although it may be too early to determine the proportion of benefits as against the costs of the project, assessments commissioned by the ATO quantified some benefits and expect other benefits to be realised in the short-term and accumulate further into the future. Whilst investigating the events leading up to and including the deployment of the income tax release and identifying areas for improvement set out below, the IGT specifically acknowledges the commitment from relevant ATO staff and contractors on a sustained basis over a number of years that was required for the project. Without this work, the project would not have achieved the deliverables it has to date.
THE CHANGE PROGRAM — A LARGE, COMPLEX INFORMATION AND
COMMUNICATIONS TECHNOLOGY (ICT) PROJECT
4.3 The Change Program was a large, complex ICT project that took around seven years to deliver. The Change Program itself was subject to constant change with components removed and added to the initial contract scope.
4.4 The ATO had sought to replace over 180 ICT systems with a number of integrated systems. These integrated systems would help the ATO to administer Australia’s taxation and superannuation laws, which for 2008-09 included:
collecting $264.5 billion in revenue, involving the processing of 50 million forms and making of 16.9 million electronic payments
managing 22.7 million taxpayer accounts involving the handling of 12.5 million phone calls, receiving 4 million pieces of correspondence and receiving 41 million electronic lodgements
managing the work of around 24,800 ATO officers on an operating budget of around $3.05 billion.
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LARGE ICT PROJECT — RISK RETURN OR COST BENEFIT DECISION
4.5 The key issue for Government, ATO management and the community at large is whether the ATO carries out its work of tax administration efficiently and effectively. The ATO uses a combination of manual and ICT systems to complete this work. The important consideration is how this work is to be carried out effectively and at lowest possible overall cost to the community.
4.6 ATO management uses ICT systems extensively in discharging this responsibility because, like other large organisations, it could not meet community expectations any other way. Indeed, the ATO is a significant software house in its own right, particularly after the implementation of the key Change Program releases. In designing ICT systems, a cost benefit or risk return trade off decision is required by management. This is a difficult but important matter. The question is, ‘what cost is acceptable for a given level of risk in developing and maintaining an ICT system?’ Or to express it another way, how close to perfect does the ICT system need to be? Is it acceptable to have certain defects or problems? If so, what kind and for how long? The ATO, like any agency, must identify and measure these costs and benefits, both tangible and intangible, and report transparently on these matters to ensure there is proper community understanding.
4.7 Certain software systems have an extremely low level of defect or problem tolerance. At one extreme, a nuclear power station or human life support system may have nil problem or defect tolerance level due to their potential cost consequences, but the associated cost of system design and its testing is much greater. Where should the tax administration ICT system be placed on this risk spectrum? Should the risks be analogous to a banking and payment transfer system?
4.8 Importantly, in using the system there is a direct cost of the system borne by the community which is outside of the direct cost to Government. This direct community cost represents a significant cost to the economy and needs to be similarly taken into account in a meaningful fashion in assessing the tax administration system’s effectiveness. Indeed, many of the taxpayer and tax practitioner frustrations arise from the problems exported by the system onto them as a consequence of the new ICT systems’ implementation.
4.9 The IGT has not had the opportunity to conduct any research on this matter, but it may be that community attitudes and expectations have shifted in relation to the level of direct costs that they are willing to bear in the running of the tax system, as being fair and reasonable in this context.
4.10 There may be some benefit in considering this further in the context of determining the value of goodwill and possible compensation for large ICT system short-term dislocation for disadvantaged parties (be they taxpayer or tax practitioners), where the greater good of the community is served through the operation of new ICT system.
4.11 Given the potential systemic risk for serious community dislocation from large ICT projects, it may be that the level of risk for return, or cost and benefit trade off, is
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one that Government may wish to consider both in more detail and also more broadly in a whole of Government sense and not just left solely to a given agency.
4.12 In relation to the Change Program, a number of key risks existed for ATO management, including the following:
Contract execution risk — a risk that the contractor did not have the resource capacity, skills and expertise to deliver the required ICT systems. The ATO sought to minimise this risk by engaging one of the larger contractors in the industry who it believed had a proven ability to deliver tax administration systems.
Technology risk — a risk that the technology either did not exist, or was not sufficiently proven to be reliable in providing services on the same scale and context for which the ATO required in administering the tax system. The ATO sought to minimise this risk by basing its design on an existing system, namely Singapore’s Tax Administration System (TAS).
Financial risks — a risk that the contract was not performed within the scope initially identified and therefore may lead to cost blow-outs and extended periods for delivery. The ATO sought to minimise this risk by concluding a fixed price contract not to exceed $230.7 million for outcomes.
Contract capture risk — a risk that the ATO would became ‘captive’ to a contractor’s judgments, to the ATO’s own detriment. The ATO sought to minimise this risk by engaging two independent assurers, Capgemini and Aquitaine (although Aquitaine was engaged some years after the contract was started).
Government policy change risk — a risk that delivery of a new Government policy would require the ATO to reallocate those resources needed for the contract’s timely and cost effective completion, resulting in cost blow-outs and extended timeframes for delivery. This risk was difficult to mitigate directly because the ATO cannot reasonably ask the Government to refrain from delivering any new taxation or retirement income policy pending the completion of an ICT change. However, it is clear that the longer the contract, the greater the size of the project and the potential for that risk to be realised.
4.13 A number of other issues arose from the nature of the Change Program. The size and complexity of the Change Program demanded a high level of focus and energy over a many years. The Change Program was a highly stressful exercise that took a toll on ATO personnel. Realistically, this stretched their capacity to continue to deliver and operate as an effective team over such a long period. Certain dysfunctional behaviours were identified by the ATO assurance providers at times in this context.78
4.14 The ATO Change program system architecture design approach also has an important history. The ATO initially employed a more integrated system design approach, rather than a more modularised one. The ATO has advised that the adopted design reflected the latest proven technology available at the time.
78 Aquitaine Consulting, Review of the Change Program at the June 2008 Replan, report to the Australian Taxation Office, Canberra, 15 July 2008, p. 1.
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4.15 The ATO also wished to minimise the technology risk by seeking a proven system. The TAS was built by Accenture and had attractive elements. It had proven reliable and had functional design features that appealed to the ATO. At the time, there was no reliable off-the-shelf technology solutions for interfaces between modules that facilitated such a development approach.
4.16 However, we are advised that the more recent industry thinking has shifted towards a more ‘modular’ software design approach, particularly now that effective interface technology solutions are available off-the-shelf (so called ‘middle-ware’).
4.17 Changes to the design of the system were inevitable in such a large, complex project, especially where Government policy initiatives must be implemented due to legislative enactment. Strong discipline is required to incorporate these changes into an already complex system design because of the high risk of costs overruns and delays in delivery.
4.18 At this stage, it is difficult for the IGT to assess the extent to which changes due to Government policy initiatives impacted on the ATO’s discipline of maintaining the program’s original scope and, therefore, costs (see for example, the extracts of Capgemini’s reports in relation to the testing of the income tax release, as set out in Chapter 3). This issue may be examined in any future review of the management of the contract delivery (see below).
4.19 An integrated system that takes around seven years to deliver by a single contractor increases the overall level of risk. Contract management over such a long duration becomes increasingly difficult for a range of practical, commercial and organisational reasons. The likelihood of major Government policy initiatives arising during lengthy projects is significant.
4.20 Fixed price contracts for projects over a long duration also increase the risk of non-delivery in part or whole in the event that the contract becomes uneconomical for the contractor. This can pressure the Government agency to become captive to the contract and accept sub-optimal performance as a means to realise some benefits from the contract.
4.21 In a state government environment, the Victorian Auditor-General has also observed from his audits of a number of major, complex ICT projects over five years that fixed price contracts for large, complex ICT projects are often problematic and often deliver reduced functionality, as outlined below:
Be aware of the risks of a fixed-price contract
Issues we have observed
Fixed-price contracts are one response to the desire for certainty, transparency and probity in acquiring and using ICT resources. Such contracts can be an effective way of managing small, tightly specified projects. For larger, more complex projects; however, fixed-price contracts are often problematic.
Complex projects are not typically, (and often cannot be) completely specified in advance—the details of later stages of the project are determined by the outcomes of
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earlier stages. This is not necessarily an indication of weak or incomplete planning, but rather simply a recognition that knowledge will increase as the project progresses.
In this environment, using a fixed-price contract for the entire project is at best optimistic and at worst deceptive.
The result often is a project delivered with reduced functionality—for the purposes of staying within the agreed budget—or a project delivered with increased cost to provide the agreed functionality.
Practical steps to take
‘Chunk’ large investments
Agencies that use fixed-price contracts for ICT projects should attempt to break the projects into small pieces and contract for each piece separately.
This will require additional time for contract negotiation and funding approval, but will increase the likelihood that the expected functionality is actually delivered at the expected cost.
Agencies that use a single fixed-price contract for a large, complex ICT project should make contingency plans for the likely outcomes of overspending and under delivery.79
Need for modularised approach to large, complex ICT contracts
4.22 In light of the above risks and observations, in future, ICT projects of this size and complexity should seek to address these risks and consider a modularised design approach, minimising single contractor concentration risks, and carefully consider the commercial realities of pricing and rewarding contractor performance.
Need for independent Government governance
4.23 The ATO’s independent assurers, Capgemini and Aquitaine, and the ATO’s post-implementation Release 3 reviewer, CPT Global, are strongly of the view that a close working relationship between the ATO and Accenture was essential to ensure both parties were aligned and working towards the same project outcomes.
4.24 The ATO endorsed this approach as it also wanted to ensure it obtained a full understanding of the new system software by, in effect, co-developing it, so it could largely maintain the new technology in-house in the future.
4.25 Such an approach also seeks to avoid antagonistic, legalistic relationship management and better facilitates actual system software delivery. There is a residual risk that parties can become too close and lose strategic direction or get captured in a situation. The ATO sought to mitigate this risk via two main checks:
79 Victorian Auditor-General’s Office, Investing Smarter in Public Sector ICT, July 2008, Melbourne, p. 29.
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engaging two independent assurers who, as a condition of engagement, knew they would be prevented from bidding for other the Change Program contract work
ATO business line staff (and not the Change Program staff, be they from ATO or Accenture) were responsible for checking that the software in production met the required outcomes.
4.26 Generally, in large ICT projects such as the Change Program, there is a need for a cohesive team working together in a partnership sense as well as having the right checks and balances so that they deliver effective outcomes and robust project scrutiny.
4.27 The process for selecting the correct contractors, independent assurers and scrutineers for the risk assessment and advisory task in this context is absolutely critical for large ICT projects. An agency’s peak decision-making body appropriately augmented with an independent, authoritative and specifically skilled government representative (external to the agency embarking on the project), as well as business-line personnel, is an important governance matter which also mitigates against any perception that there may not be appropriate checks in place.
Intra-Government issues
4.28 One of the causes of adverse impacts on taxpayers was the delays and errors attributable to the initial lack of a full and operationally effective interface between the ATO, Centrelink and the Child Support Agency as discussed in Chapter 3 and Appendix 11. Many refunds were delayed and some were incorrectly issued when they should have been garnished.
4.29 All parties expressed frustration at the lack of effective test interfaces between government agencies in a genuine end-to-end test environment. In relation to the income tax release, a major impediment was the absence of an ATO, Centrelink or Child Support Agency test environment in which the interface could be tested end-to-end without affecting their clients’ ‘live’ data. With the benefit of hindsight, many government officers interviewed (both ATO and others) cited a need for joint testing using real data in larger volumes, testing of the flow-on effects of using that data, and testing over a few cycles with a large scope of cases and scenarios. Inherently, this would also require a shared understanding of each agency’s business requirements at a more granular level.
4.30 More broadly, Government agencies have an ever increasing inter-dependence on each others’ data. Agencies now exchange and re-exchange citizen data many times over in an iterative fashion for a range of reasons. The data is used iteratively in the determination of income tax assessments and social transfer payments and also for direct offset of citizen refunds from Government against debts to Government.
4.31 This indicates an increasing need for Government ICT contracts to specifically consider significant inter-agency software interfaces and the needed for end-to-end test environments in other agencies as part of the development process. It also raises important privacy and related integrity matters.
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4.32 The form or structure of the underlying data itself is also an important consideration. Where there are consistent standards across programs, the interfaces and interactions between different Government systems should be more reliably developed and maintained.
4.33 Agreed standards for data and testing (that are appropriately modified for best practice emergence) should enable more robust and reliable data exchange via interfaces, maintaining greater data integrity across Government. A key question arises as to how this should be achieved and who is accountable for ICT program governance scrutiny and the integrity of standards setting and compliance.
4.34 The IGT considers that the ATO as one of the largest government agencies is, in a prima facie sense, much better placed to manage large ICT projects of this nature than many other agencies due to its resourcing and scale of activities. Had the ATO not had this considerable organisational scale, crisis management culture and perhaps a touch of good fortune, it would not have been able to achieve this outcome effectively. Even the ATO was heavily tested and it is considered by certain parties to be in the vanguard of government ICT development.
4.35 The IGT remit only addresses the Australian tax administration system, and while there are clear learnings from this experience for the ATO, it also raises a much broader consideration for government in relation to large ICT projects and significant inter-agency data exchanges.
4.36 Important management features of the Change Program were considered and addressed by ATO management. The IGT recognises this and the recommendation below incorporates certain features adopted by ATO management for the Change Program. The important issue for the IGT is that certain standards are set for large projects development as a key management requirement and that these are maintained into the future to reduce associated risks.
RECOMMENDATION 1
For the purpose of minimising risks arising in future large scale ICT projects, the IGT recommends that the Government consider requiring the ATO, and agencies with which it has ICT interfaces, to:
a. employ best practice modularised design approaches, avoid single contractor over-reliance, avoid lengthy projects and consider the commercial realities of pricing and rewarding contractor performance;
b. establish improved governance and scrutiny functions by ensuring:
i. the agency’s peak decision-making body (appropriately augmented with skilled and experienced ICT and key business line personnel) is directly responsible for managing the oversight of the project;
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ii. an independent, authoritative and ICT-skilled government representative (from outside the contracting agency) be a mandatory addition to the augmented agency’s peak decision-making body for the project’s duration (including post implementation follow up where appropriate); and
iii. the independent government representative report directly to Government and be required to furnish appropriate, periodic written progress reports that are publicly released at appropriate times; and,
c. fully explore formal intra-Governmental protocols or standards to provide reliable system function testing, both internal to the agency and for system interfaces between relevant Government agencies, during any ICT upgrades or changes, including:
i. standards for system data form, structure and definitions;
ii. specifying how intra-Government testing should be conducted and who is accountable for that testing and ensuring compliance with the standards; and,
iii. requiring periodic review processes to ensure such protocols or standards conform to current best practice.
ATO response: This recommendation is a matter for Government.
ATO INCOME TAX RELEASE AND ATO COMMUNICATIONS
4.37 In making the following observations and recommendations, the IGT has relied on the reports produced by the independent assurers, Capgemini and Aquitaine, and the Release 3 post-implementation reviewer, CPT Global. It is acknowledged that these parties were contracted by the ATO, therefore the IGT accepts that there may be a perception that such relationships are not completely independent as direct IGT appointments would be. The IGT has also relied on interviews with Accenture, ATO officers (past and present) and the ATO’s own documentation.
Income Tax Release Testing — behind schedule
4.38 The ATO planned (in August 2008) for income tax release product testing to be completed by the end of May 2009, with user acceptance testing occurring from May to June 2009, so that the ATO could then assess the impact of the new system on its business practices and workforce for a six-month period.
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4.39 However, it was clear that up until January 2010, the ATO was behind in its planned testing schedule.80 The ATO advised that this was due to a combination of factors, including:
the unavailability of environments for extended periods at critical times
the fact that the TaxTime 2009 build took more work than estimated due to new legislative requirements and late amendments
the difficulty and level of complexity involved in maintaining the ATO’s pre-existing legacy systems and the new Integrated Core Processing (ICP) system in parallel.
4.40 It also appears that the ATO was aware on a number of occasions that changes in design also materially contributed to the reduced timeframes for, and compression of, testing. In relation to the impact of these types of changes, Capgemini reported to the ATO in June 2008 that:
30. In the previous releases, the IA [Capgemini] observed that there has been multiple occurrences of late design change requests leading to the slippage of design schedule. This then has a cascading effect on the downstream activities affecting the overall delivery schedule. It is common and inevitable that requirements constantly change and the business knowledge is ever-evolving. The IA expects that the Change Program [CP] adheres to the design stage schedules that are agreed and endorsed in the plan, and most of all, that the CP implements the new Design Approach.81
4.41 Capgemini also reported to the ATO in November 2008 that:
The effort required to design and deliver CRs [Change Requests] is frequently underestimated.
Unanticipated CRs are being approved with limited consideration of the overall impact of the schedule.
71% of the critical resources in the CP [Change Program] are within design creating consequential delays / impacts
Planning has not adapted for a parallel release paradigm, causing compounding impacts.82
4.42 The ATO was aware that not adhering to delivery timeframes was a material risk. Since the FBT release’s deployment in April 2008, Capgemini had made the ATO
80 See for example, Capgemini’s report, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.0, Period covering 7th February 2009 – 27th February 2009, report to the Australian Taxation Office, Canberra, February 2009, pp. 3-4.
81 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.1, Period covering 1st June 2008 – 30th June 2008, report to the Australian Taxation Office, Canberra, June 2008, p. 17.
82 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.0, Period covering 10th November 2008 – 5th December 2008, report to the Australian Taxation Office, Canberra, November 2008, p. 8.
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aware that, based on prior experience, there was a real risk that a failure to adhere to estimated timeframes for delivery would reduce the quality of the software product released into production:
Principles for Delivery
In the agreed and endorsed Delivery Methods and Plans, the delivery approach contains many valuable elements. Historically, the IA [Capgemini] has observed deviations from the delivery principles in the actual execution, and would like to see specific measures in place that ensure best practices and the delivery approach are rigorously followed. This will ensure that the solution delivered will be aligned to the documented Quality Plans.
Findings:
29. In previous reports, the IA has reported that build activity eroded into testing, and that the production environment was used as testing bed. There have been many defects emerging after technical deployment into production because of insufficient testing and the lack of a real Level 4 environment that mirrors the exact environment in production, as seen since Release 3.1a FBT has gone live. The IA expects the Change Program to adhere to rigorous quality standards with regard to IPT, Partnership Testing, UAT [User Acceptance Testing] and Business Pilot, including the use of a true Level 4 environment that enables proper test of the system before it goes into production. This will help prevent the majority of defects from emerging in production.83
4.43 Capgemini repeatedly advised the ATO from December 2008 that product testing for the income tax release was behind schedule. In June 2008, Aquitaine also advised the ATO that compressing timeframes by conducting parallel product testing with business testing was also ‘highly unrealistic’. It observed, among other things, that longer delivery times were needed to increase the quality of testing to ensure a high confidence in the delivery of future releases.84
4.44 It is clear that contrary to initial plans for the income tax release, the upstream delays cascaded into downstream work, contributing to significant defects being released into production (albeit that the ATO sought to reduce impacts on taxpayers and tax practitioners through mitigation mechanisms). Although the ATO had planned from August 2008 to have a stable code base, ‘synched’ with the TaxTime 2009 code, delivered in July 2009, the income tax release product testing was not complete until January 2010.
4.45 The ATO originally planned to conduct end-to-end business testing on a stable codebase for six months, but this business testing was repeatedly delayed and ultimately done in parallel with the product testing.
83 Capgemini, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.1, Period covering 1st June 2008 – 30th June 2008, report to the Australian Taxation Office, Canberra, June 2008, pp. 16-17.
84 Aquitaine Consulting, Review of the Change Program at the June 2008 Replan, report to the Australian Taxation Office, Canberra, 15 July 2008, p. 1.
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4.46 In taking a staged approach to the review, the IGT is not in a position to precisely determine why the income tax release was not delivered by June 2009 without significant further review and directly engaging independent ICT expertise.
4.47 Such a further review would examine the extent to which the independent assurers’ recommendations were implemented and, if not implemented in full, whether that failure was a material contributing factor to the unexpected schedule slippage and reduced standard of quality of implementation into production.
ATO ‘go live’ decision
4.48 The ATO’s independent assurers say that in large ICT projects it is not unusual for problems to arise after the deployment of the software. Accenture expressed the same view. Given the systems and business readiness assessment support provided by all the relevant parties, the more important issue was to identify problems and understand their impact and the nature of the required action. There are a range of reasons that have been advanced in support of this view and a number of them are discussed below.
4.49 At the outset, it is important to acknowledge that there is a point in time at which further testing delivers diminishing returns and the costs of testing outweigh the benefits (the diagram below provides a visual representation of this principle).
Elapsed testing period
Num
ber
of s
igni
fican
t def
ects
Date of deployment
Intended position
Number of defects resolved over time
4.50 In relation to the income tax release, it was clear that in January 2010 the income tax release was not in an ideal state in terms of the number of existing defects or defects likely to arise in production. At the time, there were 229 known ‘Severity 2’
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defects.85 The ATO was also aware that an unknown number of unidentified defects would likely arise in production, as the rate of new defects emerging to the date of deployment of the income tax release was substantial.
4.51 More testing would have been beneficial. However, further testing would delay release deployment for another year, as January was the optimal deployment time because it minimised potential adverse community impacts. An April deployment date did not give the ATO enough of a settling in period and restricted its capacity to deal with any crises before the peak processing period in July to November.
4.52 Delaying the deployment for another year would not have addressed the interface issues with external systems unless the ATO and other agencies changed the way testing was done.
4.53 There were also perceived risks that the future viability of the project could not be sustained — for example, key people would likely move on, taking critical knowledge with them.
4.54 At the time of the decision, the ATO had considered the costs and benefits of going live. It also received substantial independent advice on the extent of the likely errors that could eventuate and the resulting impacts. Aquitaine had advised the ATO that as a result of known assessment defects it had estimated there would be an estimated 50,000 individual assessments affected annually. Aquitaine also advised that due to the ramp up and activities around the maintenance release update and preparation for TaxTime 10, it would be reasonable to expect widespread delays in processing affecting most taxpayers across the board until the end of the year.
4.55 Capgemini advised that their role was to assure the technical implementation of the release on the basis of technical elements only, not the business risks for the ATO. They noted that there were significant risks in other areas (that is, non-technical elements), but that there were mitigation strategies in place for these risks and that ultimately it was a decision for the ATO as to whether these non-technical risks were acceptable.
4.56 The ATO was confident that the incorrect assessments would be caught by the safety net, therefore no incorrect assessments would issue but would rather be delayed.
4.57 The ATO was also confident in its post-deployment problem mitigation mechanisms (see Chapter 3). The ATO could bring substantial resources to bear to ensure that all significant defects could be managed by preventing incorrect assessments from issuing to taxpayers and that those defects would be progressively resolved during the year.
4.58 One of these problem mitigation mechanisms was to fix defects through emergency fixes (e-fixes). As at 5 May 2010, 395 e-fixes were deployed, an average of approximately 28 per week from the date of deployment, although a number were the
85 A Severity 2 defect is defined as ’the incident restricts the usability of the application/system, but the application/system itself is running. There is no sustainable workaround available’: CPT Global, Release 3—Income Tax Implementation Review, report to the Australian Taxation Office, August 2010, p. 29.
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ATO manually manipulating systems controls, such as ‘turning on and off’ the safety net. (See the diagram below).
4.59 It is clear that from the rate and number of e-fixes that needed to be deployed within the first three months of the income tax release’s deployment, the ATO was in an invidious position where testing was effectively being extended into production (see also Capgemini’s observations on previous releases in the extract reproduced in Chapter 3).
4.60 Having found itself in such a position, based on:
the independent assurers’ opinions, as well as that of Accenture and the ATO itself and inferences that may be reasonably drawn from them, and
the cost and risk of further delay in deploying the income tax release,
the IGT has concluded that the ATO had little choice but to go live when it did.
4.61 Having made the go live decision, the approach to problems, defects and wider system difficulties, including how these were to be communicated to the community, required careful consideration and timely remediation by the ATO.
ATO did not communicate the significant risk of potential external impacts adequately
4.62 As stated earlier, the ATO did carry out its planned communication and intelligence collection strategy. This strategy included providing information to taxpayers, businesses and tax practitioners on the Change Program, particularly in relation to the income tax release. However, this plan and subsequent ATO communications ultimately proved to be inadequate in alerting the taxpaying community to adopt strategies that would minimise any potential adverse impacts.
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4.63 At the time of deciding to deploy the income tax release, the ATO estimated that there would be significant risks.
4.64 In terms of anticipated delays in return and amendment processing, if full system functionality was achieved by May 2010, the ATO estimated that it would meet its service standards (for example, process 94 per cent of individual electronic income tax returns within 14 days) by the 2010–11 income year. If functionality was not achieved by May 2010, the ATO estimated that it would likely achieve these service standards by the 2011–12 income year.
4.65 The ATO also estimated that around 170,000 taxpayers would ask for priority processing of refunds over the February to April (inclusive) period, requiring up to approximately 520 full-time equivalent staff to action them.
4.66 The ATO also estimated that there may be significant impacts on taxpayers and tax practitioners: …
5. External Readiness
The external community have been provided with the information that can be provided to them at this stage. Our focus has been on tax agents, BAS Service Providers, legal practitioners and large corporates. …
However, it should be noted that other than messages to lodge early and potential impacts on processing in the new year, there has been no direct impact on the external community at this time. With the potential for significant systems errors impacting on certain classes of clients in their assessments or accounts’ records, coupled with the general difficulties of a deployment of this size, the level of tolerance from the business community and tax practitioners in particular will be greatly tested.
Through the external forums it is clear that the large corporates, professional associations and tax agents do appreciate that the system will not be without significant impact on the ATO service delivery. As experienced in the tax bonus [initiative, it was shown that] as soon as there is an impact on their individual practices there is a point the ATO risks the lose [sic] of patience from the community. This has been sought to be managed through planned communication and intelligence collection processes to keep the external community informed on how to work with the new system. The success of this will not only be influenced by our actions but also the level of leeway given to the ATO over a long period.
Tax professions have advised that while they appreciate the size of the deployment and will be understanding; their members will need to be able to explain to their client’s reasons for delay and any inaccuracy. How long this can be accepted will be determined by their general perceptions and feedback based on perhaps isolated instances, rather than the rate of our systems corrections or ongoing contingencies.
Based on the identified systems issues at this time, it is reasonable to assume that there is a greatly increased risk that the tax profession generally or the representative groups could much earlier than previously anticipated, lose confidence in the ATO’s data
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integrity and processing ability or their belief that the system was ready for deployment from their perspective.86
4.67 In light of the above, the ATO publicly communicated general warnings that delays were likely be experienced until March 2010. However, the ATO did not communicate:
the potential risks, such as there may be unforeseen circumstances and then update the public if and when these unforseen circumstances were encountered; or
the invidious position that the ATO found itself in January 2010.
4.68 Further, when problems were encountered after deployment, the ATO did not adequately communicate (until 25 August 2010) those problems in a manner, or on a timely basis, which would have materially assisted relevant taxpayers to minimise the adverse impact on them.
4.69 The ATO did not communicate the existence of many errors until after the problems had been purportedly fixed. For example, on 29 March 2010, the ATO told the public87 of two errors (or ‘glitches’) three weeks after the ATO was aware of the problem and after many people had taken time to understand the error and contact the ATO to try to resolve their confusion (see also Appendix 11).
4.70 The ATO also did not adequately convey the reasons for problems encountered. For example, the ATO’s 15 April 2010 website update indicated that around 30,000 returns were subject to a pre-issue compliance review (high risk refunds):
The reality is that some cases take longer to process and we would always hold some up for legitimate reasons.
For example, we would not release refunds that appeared to be fraudulent or where people may owe money to the Commonwealth, for example, other agencies such as Centrelink and the Child Support Agency. Sometimes, we also check information reported in tax returns where we find discrepancies or need more information on particular claims.
Of the estimated 100,000, approximately 30,000 returns are in this category.88
4.71 However, the ATO information did not cover all reasons. There were some returns that were not awaiting information from taxpayers or being reviewed by officers, as indicated in the website update. They were prevented from being resolved because of other systems problems, such as problems preventing the processing of
86 Australian Taxation Office, Business Readiness: Executive Summary, Business Readiness Assessment for Change Program Release 3 Income Tax, document attached to the agenda for the 22 December 2009 meeting of the Change Program Steering Committee, pp. 1-6.
87 Australian Taxation Office, Latest update from Second Commissioner David Butler - 29 March 2010, available from www.ato.gov.au.
88 Australian Taxation Office, Processing status of stockpiled tax returns - latest update 15 April, available from www.ato.gov.au.
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amendment cases or shipping and entertainers’ returns. Although the system had attached high risk refund review items to these returns, staff were unable to process these returns for significant periods because of other problems with the systems that prevented the removal of the review item (see Appendix 11). Another example is the ATO’s 15 March 2010 website update which gave the impression that the problems holding up the approximate 200,000 returns held in the safety net were ‘minor’ in nature:
At our last update on 2 March 2010, we were on track to issue the remaining stockpiled refunds and assessments for income tax returns lodged in February by the end of last week.
Last week we experienced some minor problems which have delayed us issuing some of those remaining stockpiled refunds and assessments while we ensure the integrity of our data.
There are approximately 200,000 stockpiled assessments yet to issue (of which we estimate 100,000 are refunds). These include assessments which involve a baby bonus, entrepreneur tax offset, primary production averaging, exempt foreign employment income, special professional averaging, eligible termination payments or superannuation lump sum payments and non-resident withholding tax.
We have fixed these minor problems and can start releasing most of these refunds and assessments from today (with the exception of assessments involving non-resident withholding tax).89
4.72 However, the errors preventing the issuing of assessments for these returns would have likely been classified as Severity 1 defects because the errors may have led to incorrect assessments being issued, if it were not for the existence of the safety net.
4.73 It is clear that with the benefit of hindsight, the ATO’s publicly expressed confidence in resolving delays by March 2010 was optimistic. However, if the ATO had given early, clear warnings of the potential problems in a manner that enabled people to take action to minimise the potential risks, then it is likely that the community would have given the ATO more leeway, suffered the impacts with a reduced level of emotive reaction and been better placed to minimise the adverse impacts on themselves.
4.74 The ATO could have better managed expectations by communicating the worst case scenario as well as the best case scenario and the risks associated with each of these scenarios for taxpayers. For example, in the dynamic environment of fixing problems in the first couple of months of deployment, the ATO should have recognised that taxpayers and tax practitioners (although not happy that matters were not running smoothly) only wanted to be assured that the ATO was aware of the problem, working to address it and could give a future date for the taxpayer to take action if they had not received by that date either their NOA or a further update.
89 Australian Taxation Office, Latest update from Second Commissioner David Butler - 15 March 2010, available from www.ato.gov.au.
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Taxpayers did not necessarily want a firm undertaking on when returns would issue if that could not be met with a reasonable degree of certainty.
4.75 Tax practitioners wanted advance and specific warning of potential adverse impacts and made in a manner which would allow them to take action to mitigate them. This was made clear to the ATO at a meeting between the ATO and tax professional bodies on 22 April 2010. The ATO responded to this by issuing on 28 May 2010 a list of issues it was working on or had recently resolved.90 However, until 25 August 2010, the ATO did not do this with sufficient specificity. Without detailed knowledge of the likely risks, one can form the impression that the ATO perceived the delays to be insubstantial, small in number or that the majority of delayed returns were due to compliance risk checks.
4.76 Generally where the ATO did seek to warn parties, the word ‘delay’ proved too simple and subtle in communication. If there is a problem, it needs to be communicated transparently and specifically rather than just the consequence of the problem, being a delay. Such an approach did not allow people to assess their own position and risk effectively.
4.77 During August 2010, some tax practitioners with business models that offer fast refunds advised the ATO (for example, at the 6 August 2010 ATO-Tax Practitioner Forum meeting) that they were experiencing processing difficulties. Compared to previous years, these practitioners were experiencing an approximate 30 per cent drop in numbers of NOAs issuing within 14 days of lodgement. The ATO did not acknowledge that such delays existed until 20 August 2010.91
4.78 However, based on the ATO’s 10 September 2010 website communication,92 these tax practitioners’ observations appear to be justified.
RECOMMENDATION 2
To ensure that the community is fully informed and is in a position to take appropriate action with respect to potential adverse effects of significant software releases or large ICT implementations (including TaxTime requirements), the IGT recommends that the ATO, in future, communicate via the appropriate mediums and in real time:
a. the risks, in specific, meaningful and transparent terms;
b. the impact of the risks; and
c. any changes to the identification or impact of those risks, (including additions, solutions or mitigation strategies).
90 Australian, Taxation Office, Income tax processing – issues and status – 28 May 2010, available at www.ato.gov.au.
91 Australian, Taxation Office, Progress report 4 - income tax returns since 1 July 2010, 20 August 2010, available at www.ato.gov.au.
92 Australian, Taxation Office, Progress report 7 - income tax returns since 1 July 2010, 10 September 2010, available at www.ato.gov.au.
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ATO response: Agree
For major ICT deployments (such as TaxTime), the ATO will incorporate into our organisational project management methodology a requirement that specific consideration should be given to communicating:
a. the risks, in specific, meaningful and transparent terms;
b. the impact of the risks; and
c. any changes to the identification or impact of those risks, (including additions, solutions or mitigation strategies).
ATO did its best in the circumstances to fix problems as they arose
4.79 Notwithstanding the concerns regarding the ATO’s communications, the ATO did its best in the given circumstances to fix problems as they arose, diverting significant resources to mitigate and resolve issues. It was suggested to the IGT that the ATO has a good crisis management culture. It was also fortunate that certain events and strategies did come together at the right time to facilitate this outcome. In saying this, it is equally important to recognise, however, that in certain cases individual taxpayers and tax practitioners suffered (and in some cases are still suffering) adverse impacts from the new systems’ introduction until the problems were fixed.
4.80 Set out below is a discussion of some of the ways in which the ATO sought to mitigate risk and resolve issues.
E-fixes
4.81 In production, the income tax release was subject to an average of just under 28 e-fixes per week during the first 3 months (as at 3 May 2010, 382 e-fixes were deployed from the date of deployment).
4.82 CPT Global has since advised the ATO that e-fixes have the potential to create significant problems in production (as two of the main problems were caused by e-fixes with limited testing) and that ad hoc e-fixes should be consolidated into releases to enable greater testing.
Safety net
4.83 The safety net became an important feature of the system. In fact, without it, the ATO may not have decided to go live when it did.
4.84 The safety net was a late feature that was designed after the October 2009 pre-deployment testing identified numbers of errors that could not be fixed before deployment and for which there was no developed workaround. It was a preventative measure designed to minimise such adverse impacts.
4.85 The ATO successfully used the safety net to minimise the risk of incorrect assessments being issued. Around 180,000 returns were held in the safety net over differing periods of time pending the resolution of identified problems.
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4.86 There was also potential to improve the functionality of the safety net by allowing it to distinguish on the basis of combinations of data fields. It is triggered if an identified field is present. In some circumstances, it is not the existence of a particular data field that is of concern, but its combination with other data fields that may cause problems — therefore, some returns may be caught by the safety net unnecessarily. An improved functionality would allow the ATO to release returns which, although they have a particular data field present, do not otherwise give rise to concern.
4.87 It should be noted, however, that there are downsides to the overuse of the safety net. It should not become a permanent feature because, without a strong business impact focus, it may create a temptation to delay resolution of issues and provide a false sense of security. By its very nature, it also ensures that certain taxpayers will experience delays in the issuing of their NOAs.
Integrated support model
4.88 The ATO had a disciplined problem identification, escalation and prioritisation system — the integrated support model (see Appendix 8). This allowed any ATO officer to raise an issue, have it considered and prioritised for resolution. This system helped the ATO to quickly respond to identified problems on the basis of risk.
4.89 Overall, over 3900 issues, including around 2300 problems with business processes, were identified and managed by the ATO through its integrated support model.
4.90 This model could be further improved if tax practitioners were incorporated into it. Tax practitioners provide another reasonable perspective to the functioning of the tax administration system. As is evident by some of the problems encountered, tax practitioners were sometimes the first to identify those problems.
Manual processing of assessments
4.91 The ATO also undertook to manually process (when requested by taxpayers) around 7000 returns that were significantly delayed. Manually processing a tax return required the ATO to invest significant resources, not only in being able to deliver a refund quickly to taxpayers, but also in terms of the remedial work that needs to be done to correctly reflect the calculations on the ICP system.
Staff levels and internal management reporting
4.92 The ATO had ample numbers of staff to work on mitigation strategies. However, the initial management reporting did not enable the ATO to best understand how the system worked and where forms were in the system. Specifically, it did not enable the ATO to identify ‘hot spots’ so that problems could be proactively mitigated. Initial reporting somewhat hamstrung the ATO’s ability to identify where staff should be deployed. If the ATO had deployed the income tax release with better reporting on review items, then problems would have been identified and resolved earlier. However, as internal reporting developed, targeted deployment of staff improved in effectiveness. Better familiarity with the system should also improve the ATO’s ongoing ability to accurately predict the volume and type of work and also the time at which it will arrive.
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4.93 The IGT found that the ATO’s internal management reporting is not as comprehensive or detailed in relation to particular aspects of the ICT output performance or processing details. As noted earlier, the ATO prioritised resources towards the key income tax release system processing for go live readiness. Aspects of management reporting were affected by this decision. The ATO had a range of broad aggregate information on how the income tax release system was progressing. However, specific details of exactly what kinds of returns were moving through the system and their associated level of complexity was not readily available. Many concerns were raised in this context by tax practitioners in particular as to what kinds of returns were being successfully processed, rather than understanding just the broad system aggregate number the ATO were announcing.
4.94 A collateral impact of the ICT system being so large and complex is that particular categories of taxpayer or tax practitioner may have concerns or problems that are not readily seen in the management reporting from the ICT systems. It may be that other reporting mechanisms do seek to overcome any perceived shortfalls in service delivery, but there are risks that they may not work.
4.95 Clearly from the materials and submissions the IGT has received, some real problems for specific taxpayers and tax practitioners continue to arise. Whether these are so called ‘glitches’ or bigger administrative problems, it is difficult to assess at a high level without more granular reporting processes. As noted previously, there needs to be some recognition of these difficulties and the impact that they have on the affected parties. Where the ICT systems are said by the ATO to be working effectively, the assumption is that they are meeting the expectations of both Government and the broader community as to what is acceptable cost effective service delivery in this context.
4.96 A similar concern was raised regarding the impact that these difficulties may have in certain hardship situations. The ATO does seek to address hardship situations as raised by affected parties, but perhaps this area requires deeper consideration in a proactive management sense as other agencies like Centrelink recognise.
RECOMMENDATION 3
The IGT recommends that the ATO design and implement improved ICT reporting of output performance and processing details, in consultation with external stakeholders, to ensure there is better transparency and understanding of the system’s operation, for example, the type of returns that are not successfully processed as opposed to broad system aggregate statistics.
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ATO response: Agree
The ATO will continue to publish regular “issues logs” on the Tax Professionals section of the ATO website to alert tax agents of any issues as they arise where the processing of returns may be delayed.
Further, the ATO will continue its consultation with tax agents and professional associations to assist them to better understand and utilise information on the Tax Agent Portal.
Intra-Government interactions
4.97 The ATO also relied upon a strong relationship with the Child Support Agency (CSA) and Centrelink. This relationship enabled the ATO to quickly identify and resolve problems (subject to the two areas noted below) based on frequent and routine inter-agency contact with people who knew how the problems would affect clients. This interaction was based on a shared understanding that where potential problems might arise there was a need for both agencies to take action to resolve them. For example, the ATO and Centrelink shared call centre scripting to enable taxpayers to receive consistent messages from both agencies.
4.98 However, quicker remedial action by the ATO to address certain problems would have reduced the extent of delays and therefore numbers of complaints and resulting reverse work flows. For example, the ATO told the CSA that a certain problem was not a priority to resolve. The ATO escalated the priority for resolution (3-4 months after the problem was identified).
4.99 The issues of inter-agency compensation is worthy of consideration in this context. The CSA needed to dedicate resources to work around the problems that the ATO’s systems created. It may be a difficult area, but with ever increasing complexity in ICT data interchange between Government agencies, this may be a very significant issue in future where formal protocols are appropriate. To do otherwise may send the wrong signal to larger agencies about the true cost impact in a whole-of-Government sense. Naturally, as with any important working relationship, the matters would need to be of sufficient significance to warrant engaging in the process or effecting actual payments.
Economic accountability for adverse economic impacts on taxpayers and tax practitioners
4.100 Currently there is a range of compensation options open to claimants who believe they have been adversely affected by the income tax release problems and insufficient ATO communication, including:
payments made under the Taxation (Interest on Overpayments and Early Payments) Act 1983 — to compensate taxpayers for the time-value of taxpayers’ refunds where the ATO takes more than 30 days to issue credit NOAs after tax returns are lodged
payments made under the Commonwealth Scheme for Compensation for Detriment caused by Defective Administration (the CDDA Scheme)
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act of grace payments made under section 33 of the Financial Management and Accountability Act 1997
ex gratia payments (the power to make these payments emanates from the Government’s executive powers under section 61 of the Constitution).
4.101 Many tax practitioners have asked the IGT what steps they could take to seek compensation for the losses they claim to have incurred. This indicates a need for the ATO to better advise the community on their avenues for compensation.
RECOMMENDATION 4
For the purpose of addressing tax practitioners’ lack of awareness of the appropriate avenues for compensation claims, the ATO should ensure that it specifically notifies tax practitioners of the different avenues for compensation claims, including how to make claims for:
payments made under the Scheme for Compensation for Detriment caused by Defective Administration;
act of grace payments made under section 33 of the Financial Management and Accountability Act 1997;
ex gratia payments; and
any other relevant legislative or administrative compensation payments that may exist.
ATO response: Agree
The ATO website provides information on how taxpayers and tax agents can make a claim for compensation. This includes information about when losses can be compensated, service standards and where further information can be obtained. The ATO website also provides an application form which details what information is required to be submitted as part of a claim.
The ATO will highlight this information and the relevant application forms for tax agents in future communications.
4.102 The IGT also considers that the ATO should assess, as part of the initial design of the project, the potential detriments that a large scale ICT project may impose on taxpayers. This should include principles or guidelines against which claims for compensation could be assessed and processed to evaluate claims for compensation. Such an assessment should help focus the ATO on the ground rules for which compensation is payable and focus initial risk assessments as projects develop. The ATO would benefit from the reduced resources needed to consider numbers of claims. The IGT has not had the opportunity to conduct any significant research into international norms that may exist in this regard, but it is certainly an issue of some concern to the community.
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4.103 The IGT remit is only directed at the ATO, but as noted earlier the IGT considers that developing a proactive approach to the issue of compensation is worthy of consideration by other Government agencies.
RECOMMENDATION 5
For the purpose of minimising risks arising in future large, complex ICT projects, the IGT recommends that the ATO consider for future projects, whether it should have guidelines in place early in the development of the project to assess and process claims for compensation by members of the community for substantial detrimental impacts imposed.
ATO response:Agree in part
For future large and complex ICT projects the ATO will consider whether additional guidelines are needed to assess and process possible compensation cases.
4.104 As a result of problems arising from the income tax release deployment, the main loss suffered by taxpayers was the time value for money held by the ATO for extended periods of time. Compensation for this type of loss is currently addressed by the Taxation (Interest on Overpayments and Early Payments) Act 1983. The ATO had encountered difficulties in meeting its obligations to make such payments to these types of taxpayers due to problems with the ICP system. However, in September 2010 the ATO completed the payment of interest to those who are known to be owed amounts greater than $50. Amounts less than $50 have not yet been posted to accounts; the proposed ATO course of action is to post the credits to the accounts and then write them off. The credits will then be re-raised when future action occurs on the account. This process is to stop small dollar amounts being released/issued to agents when they are posted to the account.
4.105 Tax practitioners claimed, amongst other things, that they incurred the following types of losses:
damage to their reputation by reason of ATO communications that did not acknowledge ATO problems
lost time in dealing with the ATO and their clients in attempting to resolve problems, which they would not have done so if the ATO had acknowledged the specific problems and given expected dates for resolution or update
obtaining third party finance to maintain cash flows for periods after 1 March 2010 where the level of expected refunds did not occur and the actual levels did not allow outgoings to be met.
4.106 In late April 2010, the ATO moved to reduce the risk of reputational damage to tax practitioners by issuing an open letter containing an apology from the Commissioner for the delays experienced.
4.107 In late August 2010, the ATO also published a list of known issues in a manner that would help taxpayers and tax practitioners to reduce unnecessary costs in
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following up certain types of returns. A list of some of the known issues had been published earlier, however, this list was not communicated in a manner that helped taxpayers and tax practitioners to minimise their costs. This is because it was communicated after the issues had been resolved or had not specifically identified the problems.
4.108 In relation to the impacts of delayed returns on certain tax practitioners’ cash flows, the IGT considers that the ATO has been sufficiently aware for a number of years of the business model of certain tax practitioners — that is, those that rely on high volume, prompt taxpayer refunds. These businesses typically minimised risk by accepting certain clients who were of lower risk of delayed returns (for example, salary and wage earners with lower risk profiles).
4.109 Tax practitioners were also concerned with the process for claiming compensation. They claimed that, given the large numbers of practitioners affected and the likely low amounts involved, the costs for claiming compensation was disproportionate to the likely amounts payable. They suggested that the ATO could implement an expedited compensation system which imposed minimal cost to tax practitioners and provided clear criteria for compensation.
4.110 The ATO advises, on the basis of its internal advice, that compensation is not payable under the CDDA scheme because there is no defective administration:
Has there been defective administration by the Tax Office?
26. The answer to this is no.
27. The implementation of the Tax Office’s new system is a major upgrade, involving the transfer of a significant amount of data and complex systems. There have been no critical systems problems, and overall it is working well. A considerable number of returns have been processed and refunds have been paid.
28. We have accepted that there have been processing delays brought about by the implementation of our new system, but we do not consider that our actions in managing this implementation give rise to compensation. The Tax Office remains committed to ensure the reliability of our processes and the integrity of our information, even if this slows down the implementation and processing times overall. Given the magnitude of the systems overhaul, we do not consider that the consequential delays in the processing of returns, activity statements and related documents were either unreasonable or avoidable. Specifically, we do not consider that the time taken to implement our Change program and process tax returns amounts to defective administration within the meaning of the CDDA scheme.
29. In determining whether there has been defective administration, the test is not what would or should have occurred in a perfect world, but what a reasonable person would expect given the same circumstances, same powers and access to resources. The reality is that no implementation of a major computer upgrade of the kind undertaken by the Tax Office could be achieved without some delay or minor processing issues. This had been acknowledged by the Tax Office in its public broadcasts, and the timing of the implementation over the Australia Day long weekend in 2010 was chosen due to the reduced impact on taxpayers and tax agents. Accordingly, the fact that there have been
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delays and some processing issues does not mean that there is defective administration. The assessment of defective administration must be based on what another reasonable agency could achieve with the same circumstances, powers and resources, and such a comparison would not lead to a conclusion that the Tax Office has been defective or unreasonable in its implementation. …
48. Adopting this uniform approach is not to say that under no circumstances would a compensation claim relating to delayed refunds or delayed processing not be considered and paid, but in order to accept a claim, a decision maker would need to be satisfied that there had been defective administration in the processing of the income tax return other than the mere fact of the implementation of the Change program.93
4.111 It could be argued that all tax practitioners were aware that a project of this size was likely to adversely impact certain taxpayers and tax practitioners. However, the IGT considers that this conduct is not the only relevant ATO conduct that has caused taxpayers and tax practitioners’ loss. The ATO also:
was aware of the problems that were likely to be encountered and that these would result in delays to issuing refunds causing loss to taxpayers and tax practitioners
communicated that general delays would be experienced from December 2009 to March 2010, however, did not communicate the delays occurring after 1 March 2010 in manner that allowed taxpayers and tax practitioners to take action to mitigate their losses (see Appendix 11).
4.112 The IGT also considers that it would have been reasonable to alert these taxpayers and tax practitioners to specific problems or potential problems that impacted on them so that:
it allowed taxpayers and tax practitioners to take alternative action to mitigate their losses
the agency could minimise the number and negative emotive tone of taxpayers and tax practitioners’ contacts with the agency.
4.113 On the above basis, the IGT considers that the ATO should, in consultation with the tax practitioner community, robustly and openly reconsider its position on compensation claims under the CDDA scheme in light of the facts above and, in the event that the ATO decides to change its position on these claims, reconsider the process by which such claims be made.
RECOMMENDATION 6
For the purpose of addressing tax practitioners’ concerns with the basis for, and process to obtain, compensation, the IGT recommends that the ATO work with the tax practitioner community to robustly and openly reconsider its position on compensation claims under the CDDA scheme and the process by which such claims should be made.
93 Australian Taxation Office, Internal ATO correspondence, 13 April 2010.
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ATO response: Not agreed
The CDDA scheme does not operate on the basis which involves consultation about findings of defective administration. The ATO considers each case on its merits.
As at 30 November 2010, the ATO has received 59 claims from taxpayers and 35 claims from tax agents for a total of 94 claims. Each of these claims for compensation under the CDDA scheme are considered on their merits. For an individual taxpayer, interest is paid with the delayed refund if a notice of assessment is issued more than 30 days after the income tax return is lodged. The ATO will continue to consider current claims and any future claims received on their merits.
CHANGE PROGRAM IMPACTS ON ATO STAFF
4.114 The IGT received a number of submissions from ATO staff concerning a range of issues, including the following:
Front line ATO staff cited increased stress levels dealing with taxpayers and tax practitioners in an environment where they considered that they could not offer reasonable solutions.
Processing staff cited increased stress levels dealing with increased workloads, with workdays sometimes extending until the early hours of the morning.
Accounting staff cited concerns with back-end accounting integrity and reconciliation issues arising in the new system.
Interpretative assistance staff and compliance assurance staff considered that the CMWS reduced functionality and productiveness.
A range of staff considered that the CMWS did not comply with occupational health and safety requirements and that the ATO may have also breached disability discrimination law.
A range of staff were dissatisfied with ATO management’s consideration of their input into the system’s design and usability and the ATO approach to change management.
4.115 ATO management advises that substantial work was done within the organisation to minimise the risk of adverse impacts on ATO staff. ATO management advises that it considered that it had ensured that its business leaders were involved in the design and configuration of the system.
4.116 The ATO understands that there were concerns around the customisation of the CWMS. ATO management considers that the new CWMS imposed new disciplines and visibility on case work. Managers were now able to understand workloads of staff and how they were progressing against case plans.
4.117 The IGT understands that the ATO decided to implement a ‘one-size fits all’ CWMS, balancing customisation against the adaptability of the system into the future — the ATO’s priority at the time was to implement a CWMS and consider
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customisation after the completion of the Change Program. Submissions to the IGT assert that there are now other products on the market, such as Infopath, that have the potential to provide ATO staff in differing areas with effective front-end customisation of the Siebel CWMS. This would mean that the Siebel CWMS itself would remain untouched, only the user interface would be tailored to suit particular ATO functionalities. Whilst the IGT has not fully investigated the possibility of such software solutions, it seems that customisation of a front-end interface with Siebel would be likely to increase user acceptance.
4.118 Although the ATO had taken substantial steps to minimise the adverse impacts on staff, the level of ATO staff angst indicates that further work is to be done.
RECOMMENDATION 7
For the purpose of addressing ATO staff concerns in relation to the systems arising as a consequence of the Change Program, the ATO should conduct open and frank post-implementation consultation with its staff and:
a. understand the causes for ATO staff concerns; and
b. communicate the ATO’s consideration of those concerns including what action, if any, the ATO intends to take in relation to each particular concern.
ATO response: Agree in part
The ATO undertook extensive consultation with our people during the various phases of the Change Program. The engagement of our people to ATO values, objectives and priorities is very important to us and we will continue to consult with our people to understand and where possible, resolve any issues which may be a concern for them.
THE ATO’S ICT CAPABILITY DEVELOPMENT AND ONGOING CARE AND
MAINTENANCE OF THE NEW SYSTEMS
4.119 Having spent just under $800 million in implementing the Change Program (see further discussion below) steps need to be taken to minimise the risk of the ATO finding itself in similar circumstances to that which required the initiation of the Change Program. The new system needs to be maintained and steps taken to make full use of its value.
4.120 One of the main reasons for the need to change the ATO’s existing legacy systems was that these systems were encumbered with a range of limitations with the software’s design. For example, the ATO’s main system to process income tax returns, the NTS, was based on a batch processing system which impeded tax practitioners and taxpayers’ real time access to data held on that system. As the batch processing and edit checks were performed overnight, it prevented real-time correction of forms with multiple errors.
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4.121 There is a risk that a similar deterioration of adaptability could happen with the new systems. This is discussed below.
CPT Global’s recommendations
4.122 The ATO engaged an independent ICT specialist, CPT Global, to conduct a technical review of the income tax release in order to learn from what had taken place and determine a forward strategy with TaxTime 10 looming.
4.123 Upon the completion of CPT Global’s review, the IGT was able to study the resulting report and held discussions with the author. CPT Global made a number of observations and recommendations (which are set out in Appendix 13). Many of the observations and recommendations are consistent with the IGT findings.
RECOMMENDATION 8
The IGT recommends that:
a. the ATO continue to consider CPT Global’s recommendations (as set out in appendix 13) and publicly report on their progressive implementation; and
b. in the event that the ATO does not implement any of CPT Global’s recommendations, the ATO provide public reasons for not so doing.
ATO response: Agree
The ATO’s Change Program Steering Committee agreed on 19 August 2010 to implement all of the recommendations made by CPT Global. Work on all recommendations has commenced. Some recommendations have already been implemented. A report on progress will be provided on the ATO’s website.
IMPLEMENTING NEW GOVERNMENT TAX AND RETIREMENT SAVINGS POLICY
IN THE NEW ICT ENVIRONMENT
4.124 The cost savings or benefits of the new ICT system may not be fully realised if the design of future Government tax and retirement savings initiatives fall outside the functionality of the new system. A new tax or retirement savings policy may incur more set up cost if the ATO cannot accommodate it within the current system functionality.
4.125 The policy and legislative design process for new tax measures currently requires that the ATO provide advice to Treasury on administration issues. The ATO/Treasury protocol — Tax Policy and Legislation sets out that the ATO will provide advice on administrative issues, including the design and build of systems to administer tax measures. The IGT reinforces the need for this advice to include that avoidable costs have not been incurred for the ATO to redesign systems due to a policy or legislative mismatch with existing ATO systems.
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CHANGES IN SCOPE OF THE CHANGE PROGRAM
Change Program finished on 30 June 2010, with work continuing until 30 June 2011
4.126 The ATO has advised that the contract with Accenture finished on 30 June 2010, with work under the contract continuing until 30 June 2011. During the life of the contract there were substantial changes.
4.127 The ATO attributes one of the main changes to the contract to the requirement to implement the Government’s new superannuation policy — Change Order 38 to Work Order 9, which incorporated the superannuation changes into the contract and cost around $204 million in direct contract costs.
4.128 Although implementing the Government’s new superannuation policy was incorporated into the contract, some significant deliverables were also later excluded from the scope of the contract. The ATO has decided not to complete the Superannuation Guarantee and Business Activity Statement (BAS) releases under the contract. The ATO has negotiated a refund from Accenture. However, the ATO has recently issued a ‘work order’ to Accenture to do work on the design of the Income Tax Instalments release. At this stage it is unclear how this work will be funded or performed.
4.129 Notwithstanding these major changes, there remains other major uncompleted work.
4.130 The ATO systems still have no single client register or a single back-end accounting system. Very general estimates are that it may need another 30,000 to 40,000 work days to complete this work. It is unclear whether this work will be completed in the future.
4.131 In particular, during the course of this review, ATO personnel had raised concerns with internal reconciliation processes relating to the back-end accounting systems and receipt allocation to taxpayer accounts. It would be appropriate for the ATO to arrange an internal audit review of these specific back-end accounting system issues, whether the above work is completed or not.
4.132 The above indicates the need for a broader review to examine the exact scope and cost of the Change Program, including variations and an assessment of indirect costs (such as staff involved in the implementation but not included in the Change Program cost centre).
4.133 As previously noted, the IGT has taken a staged approach with this review and has not sought to review contract performance due to current resource constraints and the need to engage specific ICT expertise. A review of the performance under this contract would be useful for broader understanding of large ICT project management in the future and should be considered at a later stage.
4.134 Such a review could also examine whether anything could be learnt to minimise the risk of under-estimation in the planning phase of work needed to deliver
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such products and how that work should best be tracked to provide an evidentiary basis for more accurate predictions of completion dates.
The costs and benefits of the Change Program
4.135 The ATO recently engaged Aquitaine to assess the costs and benefits of the Change Program. In its final report, issued on 22 September 2010, Aquitaine set out the costs of the Change Program as follows:94
Costs of the Change Program
Source: EST Change Program Program Management Office, ATO Finance
4.136 It is also important to take note of Aquitaine’s conclusions, some of which are set out below:
As at its completion in June 2010 the Change Program had cost $799 million, of which $582.1 million was self funded by the ATO from the expected efficiency gains. The balance was funded by government to implement a range of major legislative reforms between 2005 and 2010.
The Change Program delivered a series of major releases of new capabilities from 2003 to 2010. The final planned release, to convert [Business Activity Statement] BAS-related products such as GST [Goods and Services Tax] and PAYGI [Pay As You Go Instalments] to the new Integrated Core Processing System (ICP), was not completed. We have not adjusted the planned benefits for the BAS Release and so have tracked against the originally planned budget and benefits.
94 Aquitaine Consulting, Review of the Benefits from the Change Program: Final report, report to the Australian Taxation Office, Canberra, 22 September 2010, pp. 6-7.
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In 2004, the Change Program business case had identified $155 million in direct and specific efficiency gains expected to be enabled by the new capabilities to be introduced. When converted to 2010 equivalent value, this represents $183 million in expected benefits. However the many changes in the ATO since 2004 made these specific benefits difficult to track. Therefore in this review, we have analysed the benefits from a top-down perspective — examining the changes in the ATO from 2003 to 2010 and then seeking to understand any linkage to the Change Program capabilities.
Overall, we have identified $147-153 million in annual efficiency benefits in the Operations and Compliance Sub-Plans. This represents a 4 year payback period on the self-funded component of the Change Program. These benefits have come from three principal areas:
� Headcount reductions in Client Account Services;
� Headcount reductions in Customer Service & Solutions;
� Productivity gains in MEI [the ATO’s Micro-Enterprise and Individuals business line] for desk-based audit activities supported by analytical models. …
The non-financial benefits to the ATO are also quite extensive, in particular the use of enterprise systems to replace many fragmented product-based systems. We have contrasted the “before” and “after” situations to illustrate the extent of this change. Overall, we believe that the ATO has gained significant benefits in a more flexible workforce using common enterprise systems. This allows the ATO, in large part, to assign work nationally based on need and the national availability of the required skills. Teams can be reassigned to different work as required and work can be reallocated electronically to meet targeted service standards. Most of these benefits stem from the introduction of enterprise work management and case management, which are now mature products and well integrated into the ATO’s business processes.
We note that the enterprise systems in concert with an improved use of analytics for case selection have contributed to creating a more transparent and accountable ATO. …
We have observed a relatively long lead time for the realisation of benefits of 2-3 years following a particular release, as new systems and processes are assimilated into the organisation. Consistent with this, for some major deliverables where benefits were expected, we have found the new systems and processes still too recent to determine whether the expected outcomes will be achieved. These include:
� The introduction of new systems for income tax processing. This was delivered in January 2010 and resulted in delays to processing returns while residual defects were eliminated, it is now processing peak volumes satisfactorily;
� New systems and processes for provision of interpretive assistance to the community. This has experienced difficulties in some aspects of its functionality, such as correspondence generation, and is currently being reviewed and refined to address these;
� The expected reduced effort in modifying systems to deliver new tax products. While we see promising signs of gains in productivity and flexibility, the recent introduction of the full ICP system has provided insufficient evidence as yet of substantially faster effort;
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� Similarly, the annual systems rollover of the tax year appears to have reduced in effort and time, but on the basis of one year’s data we regard this as too early to be conclusive. …
Overall, the Change Program has been an ambitious and far reaching undertaking for the ATO. Not all of the planned scope was completed, and a number of major legislative reforms were required to be introduced to addition to the already major program of work. We believe that the ATO has derived significant benefits in internal efficiencies from the program, as indicated by a 4 year simple payback calculation on the $582 million self-funded investment. This is based on the benefits observed and does not take account of benefits that have yet to be realised from the more recent releases. Moreover, the ATO has created a strong capability that extensively rationalises their internal processes and systems and which provides a strong platform for future development. The short term issues following the Income Tax release should be seen in this context.95
4.137 Aquitaine’s report provides a useful first step in assessing the costs and benefits of the Change Program. It may be useful to conduct a further cost/benefit analysis sometime after the Change Program work is completed and the new ICT systems have achieved full functionality and are well-settled operationally. In the meantime, there are likely to be many ongoing opinions on what should be considered in such an assessment and how they should be accounted for — for example, should the costs include those borne by the wider community in relation to problems encountered post-deployment as well? To this end, as a starting point, the ATO should release relevant information in its possession to promote open and transparent discussion in this regard.
RECOMMENDATION 9
For the purpose of improving the transparency surrounding the assessment of the costs and benefits of the Change Program, the IGT recommends that the ATO publish in full Aquitaine’s final report on its review of the costs and benefits of the Change Program.
ATO response: Agree
The ATO will publish on the ATO website the final Aquitaine report on the Costs and Benefits of the Change Program.
95 ibid., pp. i –iii.
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APPENDIX 1 — DEFINITION OF THE CHANGE PROGRAM
A.1.1 The contract between the ATO and Accenture defines the ‘Change Program’ as the following:
1. Through consultation and co-design with its clients, [the ATO] has identified a number of improvements to our products and services that will deliver an improvement in client experience. Collectively, they form [the ATO’s] blueprint for future tax administration. [The ATO] has commenced a program to deliver these improvements (Change Program).
2. The Change Program is to achieve the following:
(a) dealing with the tax system will become easier for the community;
(b) use of on-line channels will increase the availability and access to information about tax processes and advice;
(c) the taxpayer experience will be more personalised through more on-line services, reduced record keeping, targeted information, access to own data, and all client history available at point of contact;
(d) [The ATO] will deliver a more responsive service to the community through significantly improved service standards; and
(e) [The ATO] will have the flexibility to implement future changes, in a seamless manner, to the taxation system required by governments.
3. The Change Program will:
(a) enhance the client experience;
(b) create a seamless client experience across channels, products and operational processes;
(c) build a more sustainable basis for [the ATO] to meet expectations by:
(i) bringing its systems into a current day technology framework, making them Web enabled and able to respond to the community in real or near-real time;
(ii) replacing its core legacy applications that continue to be a large drain on its resources and impede it from delivering client expectations;
(iii) building new capability and capacity to respond more quickly and flexibly to demands from the government and the community;
(iv) reducing the marginal costs of implementing change; and
(v) enhancing operational performance through improved productivity.
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A.1.2 The ATO publication, The Australian Taxation Office: Change Program, Canberra March 2010, also defines the Change Program. Extracts from that publication are reproduced below.
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THE AUSTRALIAN TAXATION OFFICE: CHANGE PROGRAM 3
CHANGE PROGRAM TIMELINE
2002 ‘Listening to the community’ program helps us develop ideas to make it easier and cheaper for people to comply with their tax obligations.
A web portal is developed for tax agents to interact with us securely online.
2003 Further improvements to the web portal for tax agents introduced
A web portal for small business is developed and launched for small business
Improvements to our call centres and correspondence are introduced, increasing consistency for our clients.
2004–05 Accenture is contracted in December 2004 to deliver a single integrated system through three releases.
Release 1 sees the implementation of a single client relationship management system. This provides improved staff efficiencies and client experiences.n information about each client is accessible from one system rather than multiple systemsn electronic versions of client correspondence can be viewed in the same system as
client informationn more prompt and personalised service delivered to the client with more queries answered
in a single calln Tax officers are able to view client’s entire tax history
2006–07 Release 2 enables over 13,000 staff in over 1,000 teams across 60 sites to fundamentally change the way they carry out their work.
We replace approximately 180 case management systems with a single ATO-wide case management system.
n staff can better understand what else is happening to a client they are working withn staff can better plan, predict and track work more effectivelyn turnaround time for client queries is reducedn clients now deal with a Tax officer who has a more complete understanding of their
dealings with usn online, phone and paper products and services improvedn all inbound letters are actioned electronically
2008–10 Release 3 is the largest information technology deployment the ATO has ever undertaken.
It provides a single way of working across the ATO and involves rolling out:n our new Integrated Core Processing systemn updates to Siebel Case Management to action requests for advice
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4 THE AUSTRALIAN TAXATION OFFICE: CHANGE PROGRAM
A SINGLE WAY OF WORKING ACROSS THE TAX OFFICE
Staff use two main systems
Behind-the-scenes systems and tools that support Siebel and ICP are called enablers.
INBOUND
Most Tax Office staff: use the same systems have a complete view of client information in Siebel do the same type of work the same way.
E N A B L E R S
A single integrated system provides many benefits.
New ATO-wide business processes and two systems – Siebel and Integrated Core Processing system – make it much easier for staff to do their job.
New business processes and better systems help us to:n provide a more efficient service to the communityn manage our workload better because of improved
reporting and streamlined processes n gain more transportable skills to use across the office.
Integrated systems will also be more responsive to policy and legislation changes, making it easier to incorporate these changes into our work.
4
OUTBOUND
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THE AUSTRALIAN TAXATION OFFICE: CHANGE PROGRAM 5
RELEASE 3Release 3 was the largest and most complex release ever undertaken by the ATO. It was broken up into stages spread over a number of years to:n minimise riskn minimise impact on the communityn allow policy and legislative changes to be incorporated.
FBTApril 2008
Superannuation2008–2009
interpretive Assistance and First Home Saver AccountsJuly 2009
income taxJanuary 2010
Tax timeJuly 2010
Included Fringe Benefits Tax (FBT) into Integrated Core Processing
This means that the end-to-end processing of lodgments, payments, refunds and notices for FBT is done in our new system
Included superannuation into Integrated Core Processing:n September 2008 lost
members registern January 2009
member co-contributions, and Superannuation Holding Accounts special account
This means that the end-to-end processing of lodgments, payments, refunds and notices, and debt for these are all in the one system
Included Interpretive assistance into Siebel
Deployed First Home Saver Accounts into Integrated Core Processing
Deployed Superannuation Excess Contributions Tax into Integrated Core Processing
Included income tax into Integrated Core Processing including returns for:n individualn companiesn partnershipsn trustsn super funds
Tax time 2010 to use Integrated Core Processing
Having a single integrated system means all our work is being carried out electronically:n Integrated Core Processing is the key part of our
plans to have an integrated system for all our work. n All tax and superannuation accounts, registrations,
forms and payments, and follow-up work relating to debts and lodgements will be processed using the single integrated system.
n Siebel has provided the ATO with a single case management, workflow and client relationship management system.
n The Change Program has also delivered an enhanced reporting capability and a range of tools to support the business and tax agent communities.
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6 THE AUSTRALIAN TAXATION OFFICE: CHANGE PROGRAM
OUR NEW INCOME TAX SYSTEMOur new income tax system is the largest IT deployment we have ever undertaken and is amongst the largest anywhere in Australia.
It replaces the National Taxpayer System (NTS), which has processed income tax returns for the past 30 years and processes all tax returns for:n individualsn companiesn superannuation fundsn trustsn partnerships.
We took a careful and cautious approach to implementing our new income tax system:n We stopped processing returns from early
January 2010 so that we could transfer all taxpayer records from the old system to the new.
n The transfer began on 24 January 2010 and it took us two days to successfully convert and verify they had transferred correctly approximately:– 27 million taxpayer records – 32 million accounts – 282 million forms.
We began processing income tax returns in the new system on 1 February 2010:n Between 1 February and 12 February we undertook
a production pilot where we processed small numbers of returns to verify the system was working as expected.
n From 15 February we progressively increased the number of returns processed until 1 March 2010, by which time all returns on hand had been entered into the new system.
n We returned to normal processing turnarounds on 1 March 2010.
Between 1 February and 10 March 2010 we processed over 1.2 million returns in the new system.
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THE AUSTRALIAN TAXATION OFFICE: CHANGE PROGRAM 7
COST OF THE CHANGE PROGRAMSince it began, scope of the Change Program has changed several times largely due to legislative changes.n In December 2004 the original budget was
$445 million.n At 30 June 2009 the budget was $749 million.n At 31 December 2009 the budget was $780 million.
$245 million of the Change Program budget increases relates to legislative changes (principally superannuation simplification – $196 million).
$ %
Original business case 444,864,694 56
Super simplification 195,845,955 25
Other legislative changes 21,817,130 3
Tax time changes 27,537,381 4
Replanning 20,035,432 3
Other scope changes 70,560,663 9
Total 780,661,255 100
Super simplification – 25%
Other legislative changes – 3%
Tax time changes – 4%
Replanning – 3%
Other scope changes – 9%
Original business case – 56%
FiGURE: Breakdown of overall Change Program budget
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8 THE AUSTRALIAN TAXATION OFFICE: CHANGE PROGRAM
NOW AND IN FUTURECurrently, we are focusing on:n bedding in our new income tax system to ensure
it continues to work welln making sure that our new income tax system and
our people are ready for our peak lodgement period between July and October
n ensuring that we have a stable platform to implement any policy and legislative changes asked of us.
BENEFITS OF THE CHANGE PROGRAMBenefits include:n Tax agents now have better online access to
more integrated and personalised informationn Individuals can notify us about changes to their
personal details once, for all their tax and superannuation affairs
n Businesses experience more timely processing of forms and more certainty of status
n People contacting the ATO can be confident that we will quickly understand their position and provide a more tailored service to meet their needs.
CHANGE PROGRAM ACHIEVEMENTSThe objectives we developed for the Change Program were to:n deliver improvements to the client experience .............................................................................................n reduce operational costs ............................................................................................................................n improve flexibility and sustainability for future change. ................................................................................
To achieve this we set out to:n develop systems that are integrated, flexible and easier to change .............................................................n have a single system for case management ................................................................................................n have a single system for client relationship management ............................................................................n provide staff with a single view of client information.....................................................................................n enable staff to undertake all work electronically (no paper). .........................................................................
444
4
4
4
4
4
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APPENDIX 2 — TERMS OF REFERENCE AND SUBMISSION
GUIDELINES
TERMS OF REFERENCE
A.2.1 On 19 April 2010, the Assistant Treasurer, Senator the Hon Nick Sherry, directed the Inspector-General of Taxation (IGT) to conduct a comprehensive review of the implementation of the Australian Taxation Office's (ATO) Change Program and publicly released the following terms of reference:
A.2.2 The review should include an examination of:
a. the impacts of the Change Program on taxpayers, taxpayer representatives and other external clients of the Australian Taxation Office;
b. the impacts of the Change Program within the Australian Taxation Office;
c.the resources used to implement the Change Program and whether these resources have been efficiently applied; and
d. any other related matters.
Background
A.2.3 On 10 December 2004, the ATO approved a business case to spend $445 million in direct costs over four years to replace all tax processing information and communications technology with one Integrated Core Processing (ICP) system. This replacement and related work has been called the Change Program. A replacement was considered necessary because the ATO’s pre-existing administrative processes relied on over 180 specialised information and communication technology systems as well as a number of core processing systems. These were a source of inefficiency that contributed to a number of administrative difficulties.
A.2.4 The Change Program was to be implemented in three phases, with implementation to be completed by June 2008. The first two phases included the installation of a client relationship management system and a single case and work management system. The third phase was, amongst other things, the installation of the ICP system for all tax products. By December 2007, the ATO had implemented the first two phases of the program and considered it necessary to implement the third phase by deploying it in a number of smaller discrete modules. The first module to be deployed was the processing of fringe benefit tax returns for the 2007-08 year. The deployments of other modules, such as those relating to superannuation, were carried out in 2008 and 2009.
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A.2.5 During January 2010, the ATO progressed the implementation of the third phase by deploying the module processing income tax returns and payments (the income tax release) through the new system.
A.2.6 Recently, the Assistant Treasurer as well as the IGT received information from taxpayers, tax practitioners and their representatives that the ATO was experiencing processing delays and errors in relation to income tax return payments and lodgements.
A.2.7 Tax practitioners pointed out that they understood that the implementation of the income tax release would give rise to ‘teething problems’. However, particular frustration was expressed in relation to the nature of the ATO’s communication of the errors, the ATO’s inability to fix identified errors within reasonable times, the ATO’s shifting advice on the timeframes to fix those errors and the ATO’s lack of awareness of the impact that such communications and errors had on taxpayers and tax practitioners. Over time these frustrations have increased substantially.
SUBMISSION GUIDELINES
A.2.8 In connection with the above terms of reference, we are seeking submissions which give detailed information on observations and experiences relating to the ATO’s Change Program.
A.2.9 At the outset, it is important to acknowledge that key taxpayer and tax practitioner representatives have indicated that the immediate focus of the review be on terms of reference (a) and (b) in relation to the income tax release.
A.2.10 Accordingly, the IGT will take a staged approach to this review by first focusing on terms of reference (a) and (b) (to the extent that it affects taxpayers and tax practitioners) in relation to the income tax release, and then focusing on the remaining scope of the of the review as required. That being said, however, it is open to you to provide submissions on any aspect of this review.
A.2.11 Set out below are some guidelines for you to consider in making your submissions. This would greatly assist us to identify potential systemic issues and allow us to examine these issues more efficiently and effectively.
A.2.12 You should note that we have not verified the concerns set out in this document. Therefore, we ask that if you believe that concerns exist, you provide evidence to support your views.
Impacts on taxpayers, taxpayer representatives and other external ATO clients
A.2.13 We have received information from taxpayers, tax practitioners and their representatives on ATO practices and the resulting adverse impacts. We are now seeking detailed information and examples.
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Identification of any errors and delays
A.2.14 Where your submission deals with the impacts of the income tax release on taxpayers, tax practitioners or other external ATO clients, it is important to provide a detailed account of any specific errors and delays that you have observed or experienced. You should also provide a time line of your interactions with the ATO.
A.2.15 Concerns have been raised with us about ATO delays and errors in processing tax lodgements and payments. In some cases the concerns include:
Incorrect liabilities shown on notices of assessment;
Delays in issuing refunds and refund cheques not being attached to credit notices of assessment;
Shifting ATO advice on when refund cheques would be issued;
Incorrect dates of lodgement of tax returns and consequent incorrect general interest charge calculations; and
Payment liabilities being brought forward by seven weeks incorrectly.
A.2.16 In addition to any errors or delays that you may have observed or experienced, you should also comment and elaborate on whether the examples above are accurate and substantiated.
A.2.17 You should note that the ATO has advised that the reasons for extended delays were mainly due to two human errors within the ATO, and that there are valid reasons for other delays — such as incorrectly lodged returns. Therefore, you should explain whether the errors or delays that you have experienced were due to such valid reasons or not.
A.2.18 To the extent that you are able, your submission should also specify whether you have noticed particular ATO income tax processing treatment of particular kinds of taxpayers or different types of assessments. You should consider whether there are common characteristics amongst those experiencing problems — for example, the type of income earned (such as primary production income), the resulting liability (such debit or credit assessments) and/or the type of non-ATO liabilities (such as Centrelink or Child Support Agency debts).
ATO’s management of the income tax release implementation
A.2.19 The Change Program is a large undertaking which impacts on many aspects of tax administration. Given the scale and extent of this undertaking, you may wish to consider the ATO’s management of the implementation of the income tax release.
A.2.20 One of the main aims of the Change Program was to improve tax administration. As the project has unfolded over the years changes have been made to the scope of the program. To the extent you are able, you should comment on the specific extent of these changes and contrast these with your expectations and its impact on you.
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A.2.21 To the extent you are able to comment, you should consider the nature and adequacy of testing on the income tax release’s interaction with end users and, to the extent you are aware, testing with other non-ATO computer systems, such as Centrelink and financial institutions.
A.2.22 Once again, in relation to your views on the above management issues, your submission should provide evidence for those views.
A.2.23 Your submission should also consider the ATO’s communication during different times of its design and implementation of the income tax release:
During the initial design and implementation of the Change Program — You should consider whether initial ATO communications on the potential impacts were well publicised and informative. How did the ATO manage taxpayer and tax practitioners’ expectations and was this effective?
Immediately before the implementation of the income tax release — If you identify delays in your submission, you should consider ATO warnings late last year concerning potential delays and whether the actual delays were in excess of that which the ATO had warned.
In response to errors and delays that arose —Your submission should also consider the steps that the ATO took to identify and respond to those errors and delays.
– For example, the tax professional bodies advise that when the income tax processing was implemented in January, the ATO established a daily discussion with them on emerging issues with the profession. However, at that time no issues were raised and therefore the ATO de-escalated that discussion. The ATO advises that it continues to monitor common types of inquiries raised in its call centre. You may wish to consider whether these steps allow the ATO to adequately identify and respond to emerging problems.
– Tax practitioners have also raised concerns with the ATO’s public communication of identified issues of concern and what work is being done to fix them, including whether any interim solutions exist. If you identify this as an issue, you should also set out what alternative action the ATO could have undertaken to avoid the need for taxpayers and tax practitioners to contact the ATO about these issues of concern.
– You should also consider the extent to which subsequent ATO communications have been sensitive to the potential negative impact that the delays and errors may have on taxpayers’ confidence in their tax practitioner.
Identification of impacts on taxpayers, tax practitioners and other external clients
A.2.24 It is also important that you provide a detailed account of the specific impacts of the problems with the income tax release. Examples that have been provided to us include:
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impacts on businesses — for example, some business models rely on expected ATO refunds, with any extended delays causing cash flow problems;
increased time spent dealing with ATO to identify the reasons and solutions for the delays and errors, which detract from tax practitioners other work, such as lodging other taxpayers’ returns;
stress arising from the increased workloads and unpredictability of when particular refunds would be made available by the ATO (especially when combined with the pressure of upcoming payment obligations);
unwarranted taxpayers’ erosion of confidence in tax practitioners’ abilities — for example, taxpayers perceive that their tax practitioners have lodged their income tax returns late and delayed providing the refund to the client, perceptions which are confirmed when senior ATO staff comment that the Change Program is working well.
A.2.25 You should also consider how the ATO is addressing the impacts on you. For example:
Interest on delayed refunds — Is the ATO promptly paying the correct amount of interest for the delays encountered?
Hardship — If you experienced hardship, is the ATO appropriately responding to your concerns?
A.2.26 Where your submission identifies negative impacts, you should also set out any alternative actions, practices or behaviours which, in your view, could minimise those impacts.
A.2.27 We are also interested in receiving details on positive impacts. For example, although not a part of income tax release, the Tax Agent’s portal was implemented some time ago which, amongst other things, provided tax practitioners with access to certain ATO-held taxpayer information and obviated the need to contact the ATO by phone or in writing to obtain this information.
Impacts within the ATO
A.2.28 As stated above, we intend to take a staged approach to this review. This will mean that we will review the impacts within the ATO to the extent that they impact on taxpayers, tax practitioners and other external clients arising from the income tax release of phase 3 of the Change Program.
A.2.29 Where your submission recounts information on the impacts within the ATO, it is important to provide a detailed account of the specific event or practice that, in your view, impacted on taxpayers, tax practitioners and other external clients. These impacts may be positive in nature or negative.
A.2.30 To assist you in preparing your submission on this aspect of the terms of reference, some of the issues that have been raised with us thus far are:
129
Review into the Australian Taxation Office's Change Program
potential project fatigue;
impacts on call centres workloads and flow on effects to other areas of the ATO;
ATO relationship managers ability to adequately deal with some tax practitioner enquiries;
the limited windows of opportunity in which the ATO could implement the income tax release this year and consequent costs for missing those windows;
adequacy of ATO staff training on the new systems;
occupational health and safety requirements in relation to the ATO officer user-system interface.
Efficient application of resources to implement the Change Program
A.2.31 As noted above, we intend to take a staged approach to this review by first focusing on the first two terms of reference above in relation to the income tax release of phase 3 of the Change Program. However, it is open to you to provide submissions on any aspect of this review.
A.2.32 Where your submission does consider whether resources were efficiently applied to implement the Change Program, it is important to provide detailed and verifiable information supporting your view.
A.2.33 Submissions on this aspect of the terms of reference should also have regard to the Auditor-General’s recent performance audit report, The Australian Taxation Office’s implementation of the change program: a strategic overview. It is important to note that at the time the Auditor-General finalised his report, the ATO had not deployed the income tax release of the Change Program.
Any other related matters
A.2.34 It is also open to you to provide any information that relates to the Change Program. If you do so, please ensure that you clearly identify the underlying systemic issue to which such information relates.
Lodgement of submissions
A.2.35 The closing date for submissions is 7 June 2010. Submissions can be sent by:
Post to: Inspector-General of Taxation GPO Box 551 SYDNEY NSW 2001
Email to: [email protected]
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Review into the Australian Taxation Office's Change Program
Confidentiality
A.2.36 Submissions provided to the IGT are in strict confidence (unless you specify otherwise). This means that the identity of the taxpayer, the identity of the adviser and any information contained in such submissions will not be made available to any other person, including the ATO. Sections 23, 26 and 37 of the IGT Act 2003 safeguard the confidentiality and secrecy of such information provided to the IGT — for example, the IGT cannot disclose the information as a result of an FOI request, or as a result of a court order generally. Furthermore, if such information is the subject of client legal privilege (or legal professional privilege), disclosing that information to the IGT will not result in a waiver of the privilege.
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Review into the Australian Taxation Office's Change Program
APPENDIX 3 — SUBMISSIONS AND PEOPLE CONSULTED
DURING THE REVIEW
A.3.1 The IGT received over 90 submissions from a range of interested parties, including:
individual taxpayers
small and large businesses
tax practitioners in small practices
tax practitioner representative bodies
ATO staff from a number of different areas, such as areas within the Operations Sub-Plan (including Client Account Services), the Compliance Sub-Plan (including Tax Practitioner and Lodgement Strategy), and the Law Sub-Plan
ATO staff representatives
the Commonwealth Ombudsman.
A.3.2 The IGT has decided to keep confidential the identity of individuals and businesses making submissions. IGT staff met with a number of people who made submissions to clarify observations and issues raised in their submissions.
A.3.3 IGT staff also met the following organisations to discuss issues raised in the review:
Accenture
Aquitaine
Australian Government Information Management Office
Australian National Audit Office
Capgemini
Centrelink
Child Support Agency
CPT Global.
A.3.4 During the review, IGT staff interviewed a range of former and current ATO officers across the ATO’s different business areas — predominately within the Operations Sub-Plan.
A.3.5 Section 24 of the Inspector-General of Taxation Act 2003 provides that the IGT cannot name ATO officials, other than the Commissioner of Taxation.
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AP
PE
ND
IX 4
— G
OV
ER
NA
NC
E A
RR
AN
GE
ME
NT
S E
STA
BL
ISH
ED
BY
TH
E A
TO
-AC
CE
NT
UR
E
CO
NT
RA
CT
A.4
.1
The
follo
win
g re
prod
uce
s th
e go
vern
ance
arr
ange
men
ts e
stab
lishe
d u
nder
the
AT
O’s
con
trac
t wit
h A
ccen
ture
(Sch
edu
le 2
).
Sche
dul
e 2
— G
over
nanc
e
1.
Ind
ivid
ual
Rol
es a
nd R
espo
nsib
iliti
es
1.1
The
fol
low
ing
tabl
e d
escr
ibes
the
rol
es a
nd r
espo
nsib
iliti
es o
f th
e re
pres
enta
tive
s of
the
Cus
tom
er in
volv
ed in
the
gov
erna
nce
of t
he C
hang
e P
rogr
am:
Ro
le
Res
po
nsi
bil
ity
Sec
ond
Com
mis
sion
er, E
ST
Con
trac
t Aut
ho
rity
with
ove
rall
resp
onsi
bilit
y fo
r th
e co
ntra
ct a
nd th
e m
ana
gem
ent
of t
he
rela
tions
hip
bet
we
en
the
AT
O a
nd
Acc
entu
re
App
rove
invo
ice
paym
ent
App
rove
con
tra
ct v
aria
tion
E
scal
atio
n p
oin
t for
Con
trac
t iss
ues,
rel
atio
nshi
p is
sues
and
dis
put
es
E
scal
atio
n po
int f
or h
igh
leve
l des
ign
(BA
S)
and
deta
iled
desi
gn is
sues
O
ther
res
pons
ibili
ties
as a
re s
et o
ut in
indi
vid
ual W
ork
Ord
ers
135
Review into the Australian Taxation Office's Change Program
Ro
le
Res
po
nsi
bil
ity
Chi
ef In
form
atio
n O
ffice
r
Ope
ratio
nal r
esp
onsi
bilit
y fo
r th
e C
hang
e P
rogr
am
R
esp
onsi
ble
for
the
Con
trac
t and
the
ma
nag
emen
t of t
he r
ela
tions
hip
betw
een
Cus
tom
er a
nd S
ervi
ce P
rovi
der
R
ecom
me
nd in
voic
e p
aym
ent
R
ecom
me
nd c
ontr
act v
aria
tion
E
scal
atio
n p
oin
t for
con
trac
t iss
ues
In
rel
atio
n to
tim
e cr
itica
l ch
ang
e re
ques
ts u
nder
eac
h re
leva
nt W
ork
Ord
er (
TC
CR
s):
de
term
inin
g th
at it
is c
ritic
al th
at th
e w
ork
com
men
ce im
me
diat
ely
(if
this
det
erm
inat
ion
is n
ot m
ade
by
the
Rel
eas
e S
pon
sor)
;
de
term
inin
g th
at a
TC
CR
can
com
men
ce n
otw
ithst
and
ing
that
it m
ay
subs
tant
ially
alte
r th
e ris
k pr
ofile
as
soci
ated
with
the
rele
vant
Pro
duct
s an
d S
ervi
ces;
ap
prov
ing
the
num
ber
of
wo
rk h
ours
for
a T
CC
R;
de
term
inin
g th
at a
TC
CR
can
com
men
ce n
otw
ithst
and
ing
that
ther
e w
ill b
e no
Out
com
es r
elat
ing
to th
e tim
e cr
itica
l wor
k; a
nd
ap
prov
ing
a pr
opos
ed in
crea
se in
the
com
bin
ed to
tal o
f Cus
tom
er/ S
ervi
ce P
rovi
der
wor
k ho
urs
for
an
appr
oved
TC
CR
wh
ich
exc
eeds
160
0 w
ork
hou
rs
R
ecom
men
d T
ax O
ffice
act
ion
in r
espo
nse
to s
tage
gat
e re
port
und
er W
ork
Ord
er 9
R
ecom
me
nd to
Cha
nge
Pro
gram
Ste
erin
g C
omm
ittee
up
date
s to
the
EC
MP
Bus
ines
s C
ase
E
scal
atio
n p
oin
t for
CP
SF
gov
erna
nce
issu
es u
nder
Wor
k O
rder
9
Firs
t A
ssis
tant
Com
mis
sion
er A
TO
B
usin
ess
Sol
utio
ns
Sol
utio
n d
esig
n
R
ecom
me
nd D
esig
n si
gn o
ff
S
ign
off o
f co-
des
ign
and
law
con
form
anc
e
C
ertif
y ac
hiev
em
ent o
f des
ign
mile
ston
e
A
ppro
ve d
eta
iled
anal
ysis
wo
rk o
f min
or s
olut
ion
chan
ges
B
usin
ess
case
fun
ding
des
ign
reso
urce
s
P
erfo
rman
ce m
onito
ring
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Review into the Australian Taxation Office's Change Program
Ro
le
Res
po
nsi
bil
ity
Firs
t Ass
ista
nt C
omm
issi
oner
Ent
erpr
ise
App
licat
ions
Pos
t im
plem
enta
tion
Bus
ines
s op
erat
ions
A
dvis
e o
n qu
ality
an
d pr
ogre
ss o
f w
arra
nty
wor
k
W
ithdr
aw
an
item
from
pro
duct
ion
C
ertif
y th
at a
ll w
arr
anty
wo
rk h
as b
een
com
plet
ed
S
upp
ly c
usto
mer
sup
plie
d ite
ms
A
ppro
ve c
lient
req
ues
ted
trav
el A
ccen
ture
sta
ff
R
ecom
me
ndat
ion
to p
ay
EA
M/C
PS
F (
Wor
k O
rder
9),
war
rant
y, C
PO
SE
(W
ork
Ord
er 9
) an
d E
M (
Wor
k O
rder
9)
invo
ices
A
pplic
atio
ns m
aint
ena
nce
and
supp
ort
P
erfo
rman
ce m
onito
ring
Rel
eas
e S
pon
sor
CP
Rel
ease
Del
iver
y
(The
Rel
ease
Spo
nsor
s ar
e su
ppor
ted
in
this
rol
e b
y th
e D
eput
y R
ele
ase
Spo
nsor
s)
M
onito
r sc
ope
and
qua
lity
of r
ele
ase
activ
ity,
and
advi
se C
ust
omer
Exe
cutiv
e on
pro
gres
s ag
ains
t sch
edul
e as
re
port
ed
by
Acc
entu
re R
ele
ase
Man
age
r
P
re-d
epl
oym
ent
sign
off
and
end
orse
men
t of
desi
gn s
ign
off
D
eter
min
e w
he
ther
an
activ
ity is
a N
eces
sary
Cus
tom
er A
ctiv
ity a
nd u
nde
rtak
e/ar
rang
e ne
cess
ary
cust
om
er
activ
ities
E
nsur
e th
e su
ppl
y of
Cus
tom
er
Sup
plie
d Ite
ms
E
ndor
se e
xter
nal
cha
nge
requ
ests
In
rel
atio
n to
TC
CR
s un
der
eac
h re
leva
nt W
ork
Ord
er:
de
term
inin
g th
at it
is c
ritic
al th
at th
e w
ork
com
men
ce im
me
diat
ely
;
de
term
inin
g th
at th
e va
lue
of th
e T
CC
R w
ill n
ot e
xcee
d th
e T
CC
R fu
nd p
ool
/ ca
ppe
d am
ount
set
out
in t
he
Wor
k O
rder
;
de
term
inin
g, b
ased
on
advi
ce fr
om C
usto
me
r an
d S
ervi
ce P
rovi
der
Des
ign
Lea
ds, t
hat p
erfo
rman
ce o
f tim
e cr
itica
l wor
k is
not
like
ly to
su
bsta
ntia
lly a
lter
the
rele
vant
ris
k pr
ofile
(u
nle
ss th
e C
IO d
eter
min
es th
at th
e tim
e cr
itica
l wo
rk c
an c
omm
enc
e no
twith
sta
ndin
g th
at it
ma
y su
bsta
ntia
lly a
lter
the
risk
prof
ile);
de
term
inin
g th
at th
e co
mbi
ne
d C
usto
mer
/ S
ervi
ce P
rovi
der
wor
k h
ours
will
not
exc
eed
800
wo
rk h
our
s fo
r a
TC
CR
(un
less
the
CIO
app
rove
s th
e nu
mb
er o
f w
ork
hour
s);
and
w
her
e th
e re
leva
nt W
ork
Ord
er r
equ
ires
the
achi
evem
ent
of O
utco
mes
— d
eter
min
ing
that
the
TC
CR
is
with
in th
e sc
ope
of th
e O
utco
mes
(un
less
the
CIO
det
erm
ines
that
the
wo
rk c
an c
omm
ence
not
with
sta
ndi
ng
that
ther
e w
ill b
e no
Out
com
es r
elat
ing
to it
).
E
nsur
e C
usto
mer
com
pone
nts
of t
he a
gree
d R
eso
urce
Pro
file
and
Res
our
ce M
odel
for
Wor
k O
rder
9 a
re
satis
fied
A
ppro
val o
f Se
rvic
e P
rovi
der
pers
onn
el t
o fil
l Cus
tom
er r
ole
s
M
akin
g an
y ot
her
det
erm
inat
ions
req
uire
d as
spe
cifie
d in
the
rel
eva
nt W
ork
Ord
er.
137
Review into the Australian Taxation Office's Change Program
Ro
le
Res
po
nsi
bil
ity
Dep
uty
Rel
eas
e S
pons
or
CP
Rel
ease
Del
iver
y
M
onito
r sc
ope
and
qua
lity
of r
ele
ase
activ
ity,
and
advi
se R
ele
ase
Spo
nsor
on
pro
gres
s a
gai
nst s
che
dule
as
advi
sed
by
Re
leas
e M
ana
gers
A
ssis
t the
Rel
eas
e S
pons
or to
ens
ure
the
supp
ly o
f cus
tom
er s
upp
lied
item
s
A
ppro
ve r
eque
sted
trav
el fo
r A
ccen
ture
sta
ff
A
rran
ge
for
nece
ssar
y cu
sto
mer
act
iviti
es
Ass
ista
nt C
omm
issi
oner
Pro
cure
me
nt
Pro
ject
s
Con
trac
t Man
age
r
C
usto
mer
re
pres
enta
tive
to w
hom
dis
pute
s a
re in
itial
ly r
efer
red
to in
acc
orda
nce
with
cla
use
68.2
of t
he C
ontr
act.
M
ana
gem
ent
of
Con
trac
t and
Wor
k O
rder
s
O
wne
rshi
p of
con
trac
t ris
ks
P
repa
res
cont
ract
var
iatio
ns
C
ontr
act a
dmin
istr
atio
n
C
ontr
act e
duc
atio
n
C
ontr
act c
onfo
rman
ce
In
voic
e p
aym
ent
s/pr
oces
ses
C
ontr
act o
per
atio
nal i
ssue
s
Ass
ista
nt C
omm
issi
oner
Cor
por
ate
Pro
cure
men
t
Dire
ct S
ourc
e A
ppro
val —
AT
O a
utho
rise
d of
ficer
for
this
met
hod
of p
rocu
rem
ent
A
ppro
ves
cont
ract
var
iatio
ns th
at in
volv
e a
dir
ect s
ourc
ing
abo
ve th
e th
resh
old
set o
ut in
the
Com
mon
we
alth
P
rocu
rem
ent G
uid
elin
es.
Ass
ista
nt C
omm
issi
oner
Ent
erpr
ise
Pro
gram
Man
agem
ent
Offi
ce
Pro
gram
Ma
nage
me
nt
A
ssur
ance
on
sche
dul
e/co
st is
sues
B
usin
ess
case
mon
itor/
mai
ntai
n
R
ecom
me
nd p
aym
ent o
f inv
oic
es a
nd p
rovi
de
advi
ce o
n S
EV
invo
ice
M
ana
ge s
tag
e ga
te p
roce
ss u
nder
Wor
k O
rder
9
A
ppro
ve K
ey
Per
son
nel n
omin
ated
by
Ser
vice
Pro
vid
er
R
ecor
d tim
e of
Ser
vice
Pro
vid
er k
ey
pers
onn
el s
pent
on
Ch
ang
e P
rogr
am a
nd ta
ble
the
Ke
y P
erso
nne
l Rep
ort a
t co
ntra
ct m
ana
gem
ent
mee
tings
138
Review into the Australian Taxation Office's Change Program
1.2
The
fol
low
ing
tabl
e d
escr
ibes
the
rol
es a
nd r
espo
nsib
iliti
es o
f th
e re
pres
enta
tive
s of
the
Ser
vice
Pro
vid
er i
nvol
ved
in
the
gove
rnan
ce o
f th
e C
hang
e Pr
ogra
m:
Ro
le
Res
po
nsi
bil
ity
Clie
nt R
elat
ion
ship
Ma
nag
er
A
ppro
ves
cont
ract
var
iatio
ns
S
ervi
ce P
rovi
der
rep
rese
ntat
ive
to w
hom
dis
pute
s ar
e in
itial
ly r
efer
red
to in
acc
orda
nce
with
cla
use
68.
2 of
the
Con
trac
t.
Acc
entu
re P
rogr
am D
irect
or
R
esp
onsi
ble
for
man
agin
g de
liver
y on
beh
alf o
f Ser
vice
Pro
vide
r
R
esp
onsi
ble
for
mak
ing
dec
isio
ns a
nd
taki
ng
actio
n o
nce
ne
w c
ode
has
be
en d
epl
oye
d d
urin
g th
e w
arra
nty
peri
od o
n be
ha
lf of
Ser
vice
Pro
vid
er
Acc
entu
re R
elea
se M
ana
gers
Effe
ctiv
ely
man
age
all
thin
gs w
ithin
his
/her
dire
ct c
ontr
ol s
o as
to m
eet S
ervi
ce P
rovi
der's
obl
igat
ions
und
er th
e C
ontr
act a
nd
an
y W
ork
Ord
er.
P
rovi
de
over
all
acco
unta
bilit
y fo
r th
e de
liver
y of
the
rele
ase,
the
capa
bilit
ies
that
mak
e up
the
rele
ase
and
the
busi
ness
out
com
es, i
f an
y, d
esi
gned
to b
e d
eliv
ered
by
the
rele
ase
on b
ehal
f of S
ervi
ce P
rovi
der
P
lan
wo
rk in
acc
orda
nce
with
the
De
liver
y M
eth
ods
and
rep
ort
sta
tus
agai
nst t
he p
lan.
Man
age
issu
es a
nd r
isk
P
lan
and
dri
ve p
rogr
am le
vel a
ssur
anc
e as
agr
eed
in th
e Q
ualit
y F
ram
ew
ork
R
epor
t on
mat
ters
rel
atin
g to
the
rele
ase
P
rovi
de
perf
orm
ance
ma
nag
emen
t for
Ser
vice
Pro
vid
er s
taff
on th
e re
leas
e te
am
Id
entif
y in
tern
al a
nd e
xter
nal
dep
end
enci
es b
etw
ee
n C
han
ge
Pro
gram
tea
ms
and
BA
U
M
ana
ge C
usto
mer
and
Ser
vice
Pro
vid
er w
ork
day
bud
gets
and
dire
ctin
g d
ay
to d
ay
wo
rk a
ctiv
ities
P
rovi
de
advi
ce o
n p
rodu
ctio
n e
nviro
nmen
t and
sup
port
pro
cess
es th
at a
re a
ppro
pria
te fo
r de
liver
y of
the
rele
ase
1.
3 A
n in
dep
end
ent
assu
rer
has
been
app
oint
ed b
y th
e C
usto
mer
to
prov
ide
ind
epen
den
t as
sura
nce
in r
elat
ion
to t
he C
hang
e P
rogr
am a
nd i
ts
gove
rnan
ce.
2.
Com
mit
tees
2.1
The
re a
re a
nu
mbe
r of
dif
fere
nt C
omm
itte
es w
hich
con
trib
ute
to th
e go
vern
ance
of t
he E
nter
pris
e So
luti
ons
and
Tec
hnol
ogy
Cha
nge
Pro
gram
.
2.2
Whe
re a
Ser
vice
Pro
vid
er r
epre
sent
ativ
e is
a m
embe
r of
a c
omm
itte
e or
is
invi
ted
to
atte
nd a
com
mit
tee
mee
ting
, the
Ser
vice
Pro
vid
er m
ust
prov
ide
a su
itab
le r
epre
sent
ativ
e at
no
add
itio
nal c
ost.
139
Review into the Australian Taxation Office's Change Program
2.3
The
follo
win
g ta
ble
sets
out
the
mem
bers
hip,
rol
e an
d fr
equ
ency
of m
eeti
ngs
of e
ach
com
mit
tee.
Nam
e
Mem
ber
s R
ole
T
imin
gs
of
mee
tin
gs
ES
T
Man
age
me
nt
Com
mitt
ee
Chi
ef In
form
atio
n O
ffice
r
Firs
t A
ssis
tant
Com
mis
sion
ers
E
nter
pris
e A
pplic
atio
ns M
ana
gem
ent
B
usin
ess
Sol
utio
ns
S
ervi
ce P
rovi
der
Man
age
me
nt
S
trat
egy
Pla
nni
ng a
nd
Ass
ura
nce
C
hang
e P
rogr
am
O
CK
O
Pro
vid
e di
rect
ion
and
man
agem
ent
of e
nter
pris
e so
lutio
n a
nd
tech
nolo
gy
serv
ices
an
d ca
pa
bilit
ies.
M
onth
ly
ES
T S
ub-p
lan
Exe
cutiv
e
Sec
ond
Com
mis
sion
er
Chi
ef In
form
atio
n O
ffice
r
Chi
ef T
echn
ical
Offi
cer
Chi
ef K
now
ledg
e O
ffice
r
Firs
t Ass
ista
nt C
omm
issi
oner
, A
TO
Bus
ines
s S
olut
ions
Dep
uty
Com
mis
sion
er, T
ax P
ract
ition
er &
Lo
dgem
ent
Str
ateg
y
Dep
uty
Com
mis
sion
er, O
pera
tions
Sub
-pla
n
Chi
ef F
inan
ce O
ffice
r, A
TO
Fin
ance
and
Peo
ple
&
Pla
ce S
ub-
plan
Firs
t Ass
ista
nt C
omm
issi
oner
, Ent
erpr
ise
Ap
plic
atio
ns
Man
age
me
nt
Ass
ista
nt C
omm
issi
oner
s, C
han
ge
Pro
gram
Pro
vid
e le
ade
rshi
p, g
over
nan
ce a
nd d
ecis
ion
mak
ing
on e
nter
pris
e so
lutio
n a
nd te
chno
log
y in
vest
men
ts th
at a
lign
with
the
four
ele
men
ts o
f st
rate
gic
dire
ctio
n of
the
ES
T s
ub-p
lan:
H
elp
ing
the
com
mun
ity
Im
prov
ing
com
plia
nce
wh
ile p
rom
otin
g a
leve
l fie
ld fo
r al
l
E
ffect
ive
corp
ora
te g
over
nanc
e
B
uild
ing
org
anis
atio
nal
agi
lity
Mon
thly
140
Review into the Australian Taxation Office's Change Program
Nam
e
Mem
ber
s R
ole
T
imin
gs
of
mee
tin
gs
Cha
nge
Pro
gram
S
teer
ing
Com
mitt
ee
Com
mis
sion
er
Sec
ond
Com
mis
sion
er (
Law
)
Sec
ond
Com
mis
sion
er (
EC
MP
/IT)
Sec
ond
Com
mis
sion
er (
Com
plia
nce)
Chi
ef O
pera
ting
Offi
cer,
Ope
ratio
ns
Oth
er A
ttend
ees:
Firs
t Ass
ista
nt C
omm
issi
oner
Cha
nge
Pro
gra
m
Inte
grat
ion
& M
ana
gem
ent
Firs
t Ass
ista
nt C
omm
issi
oner
AT
O F
inan
ce
Firs
t Ass
ista
nt C
omm
issi
oner
, Bus
ines
s S
olu
tions
Dep
uty
Com
mis
sion
er, C
lient
Acc
ount
Ser
vice
s
Firs
t Ass
ista
nt C
omm
issi
oner
(R
elea
se S
pons
ors)
for
th
e C
hang
e P
rogr
am
Firs
t Ass
ista
nt C
omm
issi
oner
(R
elea
se S
pons
ors)
for
th
e C
hang
e P
rogr
am
NP
M, T
ax P
ract
ition
ers
and
Lod
gem
ent S
tra
teg
y
Chi
ef K
now
ledg
e O
ffice
r
Chi
ef In
form
atio
n O
ffice
r S
enio
r re
pres
enta
tive
—
Acc
entu
re, P
rogr
am D
irect
or
Sen
ior
repr
ese
ntat
ive
— A
cce
ntur
e, P
MO
Exe
cutiv
e
Inde
pen
dent
Ass
urer
— C
apg
emin
i
Inde
pen
dent
Ass
urer
— A
quita
ine
Con
sulti
ng
To
dire
ct th
e C
han
ge P
rogr
am
by:
se
tting
dir
ectio
n an
d o
utco
me
s
pr
iorit
y se
ttin
g an
d re
sour
ce a
lloca
tion
en
dor
sem
ent
of
Cha
nge
Pro
gram
sco
pe, s
tra
teg
y an
d de
sig
n
in
tegr
atio
n of
cha
nge
initi
ativ
es
with
AT
O P
lan
and
sub-
pla
ns
Mon
thly
141
Review into the Australian Taxation Office's Change Program
APPENDIX 5 — MAIN CHANGES IN THE CHANGE PROGRAM’S
SCHEDULING
143
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Cha
nge
Prog
ram
del
iver
y sc
hedu
le20
0320
0420
0520
0620
0720
0920
10
Dec
embe
r 200
3
Dec
embe
r 200
4In
itial
del
iver
y sc
hedu
le
Feb
ruar
y 20
07D
eliv
ery
sche
dule
re
vise
d to
in
corp
orat
e S
uper
S
impl
ifica
tion
Aug
ust 2
008
Jan
uary
200
9
Jul
y 20
10
Cas
e m
anag
emen
t (in
terp
retiv
e as
sist
ance
)
Maj
or p
hase
s of
the
Cha
nge
Pro
gram
Firs
t Hom
e Sa
ver A
ccou
nt (F
HSA
)IC
P p
rodu
ctio
n (fi
rst h
ome
save
r acc
ount
)
Rel
ease
3IC
P te
chni
cal d
eplo
ymen
tS
iebe
l upg
rade
sIC
P p
rodu
ctio
n (fr
inge
ben
efits
tax)
Rel
ease
3IC
P p
rodu
ctio
n (lo
st m
embe
rs re
gist
er, c
o-co
ntrib
utio
ns)
ICP
pro
duct
ion
(sup
er h
oldi
ng a
ccou
nts
spec
ial a
ccou
nt, s
urch
arge
, exc
ess
cont
ribut
ions
tax,
unc
laim
ed m
onie
s)
Rel
ease
1P
orta
l upd
ate
(onl
ine
capa
bilit
y)C
lient
Rel
atio
nshi
p M
anag
emen
t (C
RM
)D
ocum
ent m
anag
emen
tR
ecor
ds m
anag
emen
tA
naly
tical
mod
els
Rel
ease
3IC
P p
rodu
ctio
n (s
uper
gua
rant
ee)
ICP
pilo
t and
pro
duct
ion
(inco
me
tax)
ICP
pro
duct
ion
(act
ivity
sta
tem
ents
)N
ew o
nlin
e ca
pabi
litie
s (p
orta
ls)
Supe
rIC
P e
xten
ded
to
incl
ude
Sup
eran
nuat
ion
Rel
ease
3IC
P p
rodu
ctio
n (a
ctiv
ity
stat
emen
ts)
New
onl
ine
capa
bilit
ies
(por
tals
)C
ase
man
agem
ent
(inte
rpre
tive
assi
stan
ce)
Cas
e m
anag
emen
t (in
terp
retiv
e as
sist
ance
)
Rel
ease
3 d
eliv
ery
sche
dule
revi
sed
and
Firs
t Hom
e S
aver
Acc
ount
ad
ded
to s
cope
Rel
ease
2C
ase
man
agem
ent
Wor
k m
anag
emen
tC
onte
nt m
anag
emen
tA
naly
tical
mod
els
Exe
cutiv
e in
form
atio
n sy
stem
Rel
ease
3In
tegr
ated
Cor
e P
roce
ssin
g (IC
P) p
ilot a
nd IC
P
prod
uctio
n (fr
inge
ben
efits
ta
x, in
com
e ta
x)
2008
Cas
e m
anag
emen
t (ac
tive
com
plia
nce)
Wor
k m
anag
emen
tC
onte
nt m
anag
emen
tA
naly
tical
mod
els
Rel
ease
3In
tegr
ated
Cor
e P
roce
ssin
g (IC
P) p
ilot a
nd IC
P p
rodu
ctio
n (fr
inge
ben
efits
ta
x, in
com
e ta
x, a
ctiv
ity s
tate
men
ts)
Cas
e m
anag
emen
t (in
terp
retiv
e as
sist
ance
)N
ew o
nlin
e fu
nctio
nalit
y (p
orta
ls)
Early
impr
ovem
ent a
nd q
uick
win
s
Inve
stig
atio
n an
d st
rate
gyD
esig
n,
proc
urem
ent
and
assu
ranc
e
Con
tract
impl
emen
tatio
n
Rel
ease
2
Rel
ease
3 d
eliv
ery
sche
dule
adj
uste
d.
Sup
eran
nuat
ion
Gua
rant
ee a
nd
Sup
eran
nuat
ion
Sur
char
ge d
efer
red
and
Unc
laim
ed
Mon
ies
rem
oved
fro
m s
cope
.
ICP
tech
nica
l dep
loym
ent
Sie
bel s
yste
m u
pgra
des
ICP
pro
duct
ion
(frin
ge b
enef
its ta
x)
ICP
pro
duct
ion
(lost
mem
bers
regi
ster
, co-
cont
ribut
ions
)
ICP
pro
duct
ion
(sup
er h
oldi
ng a
ccou
nts
spec
ial a
ccou
nt, s
urch
arge
, exc
ess
cont
ribut
ions
tax,
unc
laim
ed m
onie
s)
Firs
t Hom
e Sa
ver A
ccou
nt (F
HSA
)IC
P p
rodu
ctio
n (fi
rst h
ome
save
r acc
ount
)
Cas
e m
anag
emen
t (in
terp
retiv
e as
sist
ance
)
Rel
ease
3IC
P p
ilot a
nd p
rodu
ctio
n (in
com
e ta
x)N
ew p
orta
ls
Rel
ease
3R
elea
se 3
Rel
ease
3IC
P p
ilot a
nd p
rodu
ctio
n (in
com
e ta
x)IC
P p
rodu
ctio
n (a
ctiv
ity s
tate
men
ts)
New
por
tals
Pro
gram
con
clud
ed.
Rel
ease
3 d
eliv
ery
sche
dule
adj
uste
d.
Act
ivity
Sta
tem
ents
an
d S
uper
annu
atio
n G
uara
ntee
rem
oved
fro
m s
cope
.
Rel
ease
3R
elea
se 3
ICP
tech
nica
l dep
loym
ent
Sie
bel s
yste
m u
pgra
des
ICP
pro
duct
ion
(frin
ge b
enef
its ta
x)
ICP
pro
duct
ion
(lost
mem
bers
regi
ster
, co-
cont
ribut
ions
)
ICP
pro
duct
ion
(sup
er h
oldi
ng a
ccou
nts
spec
ial a
ccou
nt, s
urch
arge
, exc
ess
cont
ribut
ions
tax,
unc
laim
ed m
onie
s)
Firs
t Hom
e Sa
ver A
ccou
nt (F
HSA
)IC
P p
rodu
ctio
n (fi
rst h
ome
save
r acc
ount
)
144
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APPENDIX 6 — THE ATO’S INCOME TAX RETURN AND
PAYMENT PROCESSING SUMMARY
145
Review into the Australian Taxation Office's Change Program
ICP
Proc
essin
g Sum
mary
Page
1D
RAF
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ctiv
ity c
reat
ed, f
orm
co
rrec
ted
& s
ubm
itted
for
re-p
roce
ssin
g in
ICP
If al
erts
are
pre
sent
on
acco
unts
etc
., or
if ri
sk ru
les
fail,
revi
ew it
em a
ctiv
ity
is c
reat
ed, r
esol
ved
and
subm
itted
fo
r re
-pro
cess
ing
in IC
P
OA
Can
dida
te s
elec
tion
Can
dida
tes
are
sele
cted
fr
om n
ED
W&
sto
red
in O
A
data
base
Trea
tmen
t stra
tegy
A tr
eatm
ent s
trat
egy
is
appl
ied
to s
elec
ted
cand
idat
es
Dem
and
man
agem
ent
Trea
tmen
t m
anag
emen
t
Atta
ch c
andi
date
con
text
SQ
L
EA
I
SIE
BE
L
ICP
OU
TBO
UN
D
TAR
GET
SY
STE
MS
Inte
ract
ion
Inte
ract
ion
E.g
. cre
ate
auto
cas
e,
phon
e ca
ll ac
tivity
E.g
. sen
d de
bt
dem
and
lette
r
E.g
. pop
ulat
e cl
ient
risk
pro
file
If pe
riod
in D
RIf
no C
R
foun
d
Trig
ger r
efun
d &
Issu
e co
rres
If pe
riod
in C
R
(Leg
acy)
ELS
Inte
grat
ion
laye
r
Dire
ct to
inte
grat
ion
laye
r
Dep
endi
ng o
n ch
anne
l;•F
ax g
atew
ay•I
mag
e ce
ntre
s•M
ail r
oom
•Sor
ting
&
Cla
ssify
ing
•Ind
ex, C
lass
ify &
R
oute
Tran
sfer
s st
ruct
ured
fo
rms
&
paym
ents
If al
erts
on
acco
unts
et
c.
May
upd
ate
Sie
bel c
ase
nED
WE
DW
Ent
erpr
ise
Dat
a W
areh
ouse
ETL
Ext
ract
, Tra
nsfo
rm,
Load
Dat
a so
urce
d fro
m IC
PN
ew E
nter
pris
e D
ata
War
ehou
se
Dat
a so
urce
d fro
m L
egac
y &
ICP
If fa
ils ri
sk
rule
s
Trig
ger t
o cr
eate
S
iebe
l act
ivity
Che
ck o
ffset
deb
ts in
hie
rarc
hy o
rder
If er
rors
, su
spen
se
form
cr
eate
d
EA
IIn
tegr
atio
n la
yer
BU
SIN
ESS
INTE
LLIG
ENC
E
CO
GN
OS
AC
TUA
TE
Rep
ortin
g an
d R
econ
cilia
tion
–O
ngoi
ng a
cros
s al
l cap
abilit
ies
in th
e E
nter
pris
e S
olut
ion
EXE
CU
TIV
E
MA
NA
GE
ME
NT
TRA
NS
AC
TIO
NA
L
CO
GN
OS
CO
GN
OS
/ AC
TUAT
EC
OG
NO
S
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ntai
n cl
ient
dem
ogra
phic
info
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/ m
aint
ain
secu
rity
deta
ils•A
dd /
mai
ntai
n su
ppre
ssio
ns•A
dd /
mai
ntai
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ient
acc
ount
s / r
oles
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nt c
alen
dar
(lodg
men
tobl
igat
ions
)•A
dd /
mai
ntai
n FI
A’s
REG
ISTR
ATI
ON
AIS •M
aste
r of c
lient
reg
istra
tion
deta
ils
Upd
ates
BU
SIN
ESS
INTE
LLIG
ENC
E
TRD
B
Tax
lodg
men
tda
ta p
ublis
hed
Clie
nt Id
entif
icat
ion
Cen
tre (I
D M
atch
ing)
CID
C
Info
rmat
ion
Mat
chin
g an
d A
naly
sis
Sys
tem
G
ener
ates
dis
crep
ancy
E
.g. i
ncom
e fr
om s
hare
s
Cas
e A
ctio
ning
Sys
tem
Com
plia
nce
treat
men
ts to
ta
rget
sys
tem
s E
.g.
•War
ning
lette
r
•Am
endm
ent
•Aud
itS
IEB
EL
ICP
OU
TBO
UN
D
IMA
S
CA
S
Som
e da
ta u
sed
Inte
rface
to
allo
w v
iew
ing
of
CID
Cda
ta fo
r di
scre
panc
ies
TAR
GE
T S
YSTE
MS
(Leg
acy)
Rep
ortin
g la
yers
:
To
outb
ound
(Leg
acy)
13U
pdat
e G
ener
al L
edge
r (G
L) a
nd c
ompl
ete
reco
ncili
atio
ns
7. A
ble
to p
roce
ss a
men
dmen
ts (T
ax P
ayer
, Age
nt a
nd A
TOin
itiat
ed
from
all
chan
nels
)
9. U
pdat
e an
d m
aint
ain
tax
paye
r ac
coun
ts
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etur
n P
roce
ssin
g –
Cre
dit A
sses
smen
t (R
efun
d)
3. M
anag
e Lo
dgm
entO
blig
atio
ns
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etur
n P
roce
ssin
g –
Deb
it A
sses
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t
14R
epor
ting
11H
igh
Ris
k R
efun
d an
d Id
entit
y M
atch
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proc
essi
ng
5. A
bilit
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age
acco
unts
in D
ebt
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aym
ent P
roce
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8. In
tere
st a
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enal
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roce
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12D
ata
and
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g. R
eser
ve
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k
10M
anua
l Prio
r Yea
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rm P
roce
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re 2
004)
6. A
ctio
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oces
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ors
BU
SIN
ESS
OU
TCO
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1 141312111098765432
12
14
1312
9
6 54
3
5
711
11
AIS
(Leg
acy)
Pas
ses
data
to R
efun
der
E.g
. Act
ivity
Sta
tem
ents
Inte
grat
ion
laye
r
Ext
erna
l In
terf
aces
AB
R, D
IAC
, D
ES
T
Dat
a ex
tract
s
ELS
Dire
ct to
ICP
Oth
er a
genc
y &
3rd
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ty d
ata
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ks, C
entre
link,
AIIR
Dat
a so
urce
d fro
m A
IS a
nd
othe
r Leg
acy
syst
ems
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s ba
ck to
Pos
t tra
nsac
tion
E.g
. Mon
thly
GIC
run
Dai
ly ro
ll up
s to
GL
54
5
Upd
ates
to S
iebe
l cas
e
ATO
user
inpu
ts
Pre
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4 IT
R
10
Inco
me
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am
endm
ent &
pe
nalty
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lcul
atio
ns
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TAP
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GE
& P
AY
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acy)
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ed d
irect
ly)
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RK
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NA
GEM
ENT
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egac
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TS
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al fo
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n or
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nt
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pa
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ue o
r BP
ay
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Sm
art C
aptu
re
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tem
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orts
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cube
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r pr
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retu
rns
whe
n IT
Rpr
epar
ed
12
12
9
OU
TPU
TS
11
Dat
a up
date
s E
.g. C
andi
date
reco
rds
Cor
roge
n
data
base
Pos
t tra
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t tra
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ue S
ervi
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ork
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stem
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s &
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OM
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AYM
ENT
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CES
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G (
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ESS
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luat
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riod
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nce
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l fin
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orec
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ate
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aim
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redi
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dd s
undr
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ust e
ffect
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anua
l pen
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ost &
fine
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nitia
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nitia
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nlin
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man
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redi
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t
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man
ual);
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tiate
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ual c
redi
t bal
ance
requ
est
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x ag
ent r
ecei
ves
notif
icat
ion
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, SoA
, et
c.
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age
bala
nce
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cess
deb
it ba
lanc
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redi
t per
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redi
t elig
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heck
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redi
t bal
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est
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or c
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isk
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arry
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ard
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ate
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nd v
ouch
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ired
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igge
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alty
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ittan
ce /
paym
ent a
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e•C
hequ
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t is
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pdat
e st
atus
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d di
sbur
sem
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ceiv
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und
deliv
ery
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k pr
int
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er
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CH
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tra
nsac
tion
to b
ank
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A
daily
file
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ate
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eral
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dger
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UN
TIN
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CC
OU
NTI
NG
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RE
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DE
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uses
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dits
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offs
et a
ny le
gacy
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ts;
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rnal
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nal o
ffset
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Cen
trelin
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ligat
ions
be
twee
n co
nsen
ting
partn
ers
CR
ED
IT O
FFS
ET
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es
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its fr
om le
gacy
to o
ffset
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y IC
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bts
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oing
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ch p
roce
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ru
n in
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aint
ain
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reje
cts
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etur
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alcu
late
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dat
es
SIE
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ctiv
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reat
ed, f
orm
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rrec
ted
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ubm
itted
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roce
ssin
g in
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erts
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pre
sent
on
acco
unts
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., or
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sk ru
les
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revi
ew it
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ctiv
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reat
ed, r
esol
ved
and
subm
itted
fo
r re
-pro
cess
ing
in IC
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OA
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dida
te s
elec
tion
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dida
tes
are
sele
cted
fr
om n
ED
W&
sto
red
in O
A
data
base
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tmen
t stra
tegy
A tr
eatm
ent s
trat
egy
is
appl
ied
to s
elec
ted
cand
idat
es
Dem
and
man
agem
ent
Trea
tmen
t m
anag
emen
t
Atta
ch c
andi
date
con
text
SQ
L
EA
I
SIE
BE
L
ICP
OU
TBO
UN
D
TAR
GET
SY
STE
MS
Inte
ract
ion
Inte
ract
ion
E.g
. cre
ate
auto
cas
e,
phon
e ca
ll ac
tivity
E.g
. sen
d de
bt
dem
and
lette
r
E.g
. pop
ulat
e cl
ient
risk
pro
file
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riod
in D
RIf
no C
R
foun
d
Trig
ger r
efun
d &
Issu
e co
rres
If pe
riod
in C
R
(Leg
acy)
ELS
ELS
Inte
grat
ion
laye
r
Dire
ct to
inte
grat
ion
laye
r
Dep
endi
ng o
n ch
anne
l;•F
ax g
atew
ay•I
mag
e ce
ntre
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ail r
oom
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ting
&
Cla
ssify
ing
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ex, C
lass
ify &
R
oute
Tran
sfer
s st
ruct
ured
fo
rms
&
paym
ents
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erts
on
acco
unts
et
c.
May
upd
ate
Sie
bel c
ase
nED
WE
DW
Ent
erpr
ise
Dat
a W
areh
ouse
ETL
Ext
ract
, Tra
nsfo
rm,
Load
Dat
a so
urce
d fro
m IC
PN
ew E
nter
pris
e D
ata
War
ehou
se
Dat
a so
urce
d fro
m L
egac
y &
ICP
If fa
ils ri
sk
rule
s
Trig
ger t
o cr
eate
S
iebe
l act
ivity
Che
ck o
ffset
deb
ts in
hie
rarc
hy o
rder
If er
rors
, su
spen
se
form
cr
eate
d
EA
IIn
tegr
atio
n la
yer
BU
SIN
ESS
INTE
LLIG
ENC
EB
USI
NES
S IN
TELL
IGEN
CE
CO
GN
OS
AC
TUA
TE
Rep
ortin
g an
d R
econ
cilia
tion
–O
ngoi
ng a
cros
s al
l cap
abilit
ies
in th
e E
nter
pris
e S
olut
ion
EXE
CU
TIV
E
MA
NA
GE
ME
NT
TRA
NS
AC
TIO
NA
L
CO
GN
OS
CO
GN
OS
/ AC
TUAT
EC
OG
NO
S
ICP
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ntai
n cl
ient
dem
ogra
phic
info
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/ m
aint
ain
secu
rity
deta
ils•A
dd /
mai
ntai
n su
ppre
ssio
ns•A
dd /
mai
ntai
n cl
ient
acc
ount
s / r
oles
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nt c
alen
dar
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men
tobl
igat
ions
)•A
dd /
mai
ntai
n FI
A’s
REG
ISTR
ATI
ON
REG
ISTR
ATI
ON
AIS •M
aste
r of c
lient
reg
istra
tion
deta
ils
Upd
ates
BU
SIN
ESS
INTE
LLIG
ENC
EB
USI
NES
S IN
TELL
IGEN
CE
TRD
B
Tax
lodg
men
tda
ta p
ublis
hed
Clie
nt Id
entif
icat
ion
Cen
tre (I
D M
atch
ing)
CID
C
Info
rmat
ion
Mat
chin
g an
d A
naly
sis
Sys
tem
G
ener
ates
dis
crep
ancy
E
.g. i
ncom
e fr
om s
hare
s
Cas
e A
ctio
ning
Sys
tem
Com
plia
nce
treat
men
ts to
ta
rget
sys
tem
s E
.g.
•War
ning
lette
r
•Am
endm
ent
•Aud
itS
IEB
EL
ICP
OU
TBO
UN
D
IMA
S
CA
S
Som
e da
ta u
sed
Inte
rface
to
allo
w v
iew
ing
of
CID
Cda
ta fo
r di
scre
panc
ies
TAR
GE
T S
YSTE
MS
(Leg
acy)
Rep
ortin
g la
yers
:
To
outb
ound
(Leg
acy)
13U
pdat
e G
ener
al L
edge
r (G
L) a
nd c
ompl
ete
reco
ncili
atio
ns
7. A
ble
to p
roce
ss a
men
dmen
ts (T
ax P
ayer
, Age
nt a
nd A
TOin
itiat
ed
from
all
chan
nels
)
9. U
pdat
e an
d m
aint
ain
tax
paye
r ac
coun
ts
1. R
etur
n P
roce
ssin
g –
Cre
dit A
sses
smen
t (R
efun
d)
3. M
anag
e Lo
dgm
entO
blig
atio
ns
2. R
etur
n P
roce
ssin
g –
Deb
it A
sses
smen
t
14R
epor
ting
11H
igh
Ris
k R
efun
d an
d Id
entit
y M
atch
ing
proc
essi
ng
5. A
bilit
y to
man
age
acco
unts
in D
ebt
4. P
aym
ent P
roce
ssin
g
8. In
tere
st a
nd P
enal
ty p
roce
ssin
g
12D
ata
and
trans
actio
n tra
nsfe
rs w
ith o
ther
age
ncie
s e.
g. R
eser
ve
Ban
k
10M
anua
l Prio
r Yea
r Fo
rm P
roce
ssin
g (P
re 2
004)
6. A
ctio
n pr
oces
sing
err
ors
BU
SIN
ESS
OU
TCO
MES
1 141312111098765432
12
14
1312
9
6 54
3
5
711
11
AIS
(Leg
acy)
Pas
ses
data
to R
efun
der
E.g
. Act
ivity
Sta
tem
ents
Inte
grat
ion
laye
r
Ext
erna
l In
terf
aces
AB
R, D
IAC
, D
ES
T
Dat
a ex
tract
s
ELS
ELS
ELS
Dire
ct to
ICP
Oth
er a
genc
y &
3rd
Par
ty d
ata
E.g
. Ban
ks, C
entre
link,
AIIR
Dat
a so
urce
d fro
m A
IS a
nd
othe
r Leg
acy
syst
ems
3
Loop
s ba
ck to
Pos
t tra
nsac
tion
E.g
. Mon
thly
GIC
run
Dai
ly ro
ll up
s to
GL
54
5
Upd
ates
to S
iebe
l cas
e
ATO
user
inpu
ts
Pre
200
4 IT
R
10
Inco
me
Tax
am
endm
ent &
pe
nalty
ca
lcul
atio
ns
WIN
TAP
LOD
GE
& P
AY
LOD
GE
& P
AY
(Leg
acy)
ICP
UI
(key
ed d
irect
ly)
WO
RK
MA
NA
GEM
ENT
WO
RK
MA
NA
GEM
ENT
AQ
S(L
egac
y)
INPU
TS
Ele
ctro
nic
Pap
er
Occ
asio
nal p
roce
sses
A ta
xpay
er /
tax
agen
t lod
ges
an
orig
inal
form
, am
endm
ent
to
an o
rigin
al fo
rm
OR
pay
men
tba
sed
on a
lo
dgm
ent
oblig
atio
n or
de
bt
E.g
. clie
nt
lodg
es IT
Rvi
a eT
axor
mak
es a
pa
ymen
t by
cheq
ue o
r BP
ay
7
Sm
art C
aptu
re
RD
CC
ELS
take
-on
IVR
(ITL)
IPP
S
Sys
tem
s in
clud
e:
(Rep
orts
onl
y av
aila
ble
from
Sie
bel)
CO
GN
OS
(cub
es)
CO
GN
OS
cube
s
Onl
y so
me
data
use
d fo
r pr
e-fi
ll of
E
LS, e
Tax
retu
rns
whe
n IT
Rpr
epar
ed
12
12
9
OU
TPU
TS
11
Dat
a up
date
s E
.g. C
andi
date
reco
rds
Cor
roge
n
data
base
Pos
t tra
nsac
tion
8
Indi
vidu
als
tax
retu
rn d
ata
to T
RD
B
Pos
t tra
nsac
tion
8
Com
pany
tax
retu
rn d
ata
to T
RD
B
Act
ion
Que
ue S
ervi
ce
-W
ork
Allo
catio
n sy
stem
for A
IS e
xcep
tions
C
Ope
ratio
nal C
ontr
ol P
oint
s
()
–,
,
J
C
146
Review into the Australian Taxation Office's Change Program
APPENDIX 7 — INCOME TAX RELEASE TESTING
147
Review into the Australian Taxation Office's Change Program
Inco
me T
ax T
est P
lan –
As at
Mar
ch 20
09
1
0512
1926
0209
1623
0209
1623
3006
1320
2704
1118
2501
0815
2229
0613
2027
0310
1724
3107
1421
2805
1219
2602
0916
2330
0714
2128
0411
1825
Comm
ence
EU
Enab
lemen
t
Lock
dow
n de
ploym
ent s
ched
uleOp
erat
ionali
se M
ission
Con
trol
AA S
naps
hot
AA L
ockd
own
Comm
ence
sta
ff tra
ining
Drop
s to
AT:
12.7.
212
.7.3
12.8
12.9
12.10
12.11
Drop
s to
PT:
12.7.
112
.7.2
12.7.
312
.812
.912
.1012
.11
Form
s De
sign
Valid
ation
Tes
t:Ind
ividu
al bu
ild c
omple
te
Prod
uct T
est -
Com
pany
Comp
any
Test
Com
plete
Indivi
dual
Test
Com
plete
Prod
uct T
est -
Indiv
idual
Busin
ess
Pilot
0512
1926
0209
1623
0209
1623
3006
1320
2704
1118
2501
0815
2229
0613
2027
0310
1724
3107
1421
2805
1219
2602
0916
2330
0714
2128
0411
1825
Tax
Tim
e 09
and
Ext
erna
l CRs
TT09
Des
ign C
losur
e
TT09
Buil
d Co
mplet
e
0512
1926
0209
1623
0209
1623
3006
1320
2704
1118
2501
0815
2229
0613
2027
0310
1724
3107
1421
2805
1219
2602
0916
2330
0714
2128
0411
1825
Conv
ersio
n de
sign
Conv
ersio
n Bu
ild a
nd T
est
June
06
Code
Syn
chPr
oduc
tion
Regr
essio
n te
st
ATCo
rres
and
OI B
uild
Cycle
1Cy
cle 2
Cycle
3Pe
rform
ance
Tes
t
Corre
s &
OI D
esign
Form
s Bu
ildFo
rms
Build
CF B
uild
Core
Buil
dInt
erfa
ces
Build
Cycle
5Go
live
wind
owCo
nver
sion
- Ind
ividu
al Up
date
s an
d Te
stCo
nver
sion
supp
ort o
f Par
allel
Run/
Pilot
Core
& F
orms
Des
ign
Cycle
8Cy
cle 9
Indivi
dual
Perfo
rman
ce T
est -
Inco
me T
ax
Shak
edow
nPa
ralle
l Run
Cycle
1Cy
cle 2
Cycle
3Cy
cle 4
Comp
any
Cycle
3Cy
cle 4
Cycle
5Cy
cle 6
Cycle
6Cy
cle 712
.10
12.1
1
Co -
all y
ears
Full 2
007
IITR
Full 2
008
IITR
12.7
.112
.7.2
12.7
.312
.812
.9
…
AT -
Comp
any
Fix D
rops
AT -
Indivi
dual
AT -
Indivi
dual
Fix D
rops
Comp
any
Co F
ixCo
mmun
icatio
ns…
Indivi
dual
Core
Buil
dInd
AT
Indivi
dual
Indivi
dual
Exte
rnal
Read
iness
Co C
orre
s AT
Ind C
orre
s CR
sInd
Cor
res
ATTr
aining
and
Per
form
ance
Sup
port
…
Indivi
dual
Indivi
dual
Prior
Yea
rs fo
rms
Relea
se re
adine
ssRe
ports
Buil
dTr
eatm
ent P
lans
Build
& A
TBu
sines
s Pr
oces
s Al
ignme
nt
Aug
Sep
Oct
Nov
Dec
Jan
2009
2009
2010
Jan
Feb
Mar
Apr
May
Jun
Jul
EAM
148
Review into the Australian Taxation Office's Change Program
Inco
me T
ax T
est P
lan –
As at
Dec
embe
r 200
9
2
05
1219
26
02
09
162
30
20
916
23
30
06
132
02
70
411
182
50
10
815
22
29
06
132
02
70
310
172
43
10
714
21
28
05
1219
26
02
09
162
33
00
714
21
28
04
1118
25
01
08
152
2
Deplo
ym
ent A
ppro
ach e
ndors
ed (
who, w
here
, w
hat)
Com
mence E
U E
nable
ment (n
on P
ilot EU
s)
AA
begin
sA
A L
ockd
ow
n (
phased)
MC
opera
tional
Ente
rprise P
rocedure
s f
or
UA
TE
nte
rpris
e p
rocedure
s fo
r P
ilot
Rem
ain
ing E
ntr
Pro
cedure
s
UA
T tra
inin
g b
egin
sPilo
t enable
ment begin
sG
o-L
ive tra
inin
g b
egin
s (
grp
1)
Dro
ps to A
T:
12.7
.212
.7.3
12.8
12.9
12.9
.112
.9.2
12.1
012
.11
…
…
Dro
ps to P
T:
12.7
.112
.7.2
12.7
.312
.812
.9.2
12.1
012
.11
Form
s D
esig
n V
alid
atio
n T
est:
Indiv
idual b
uild
com
ple
te
Pro
duct Test -
Com
pany
Pro
duct Test -
Indiv
idual
UA
TR
1U
AT
R2
Convers
ion s
upport
of
Para
llel R
un/P
ilot
05
1219
26
02
09
162
30
20
916
23
30
06
132
02
70
411
182
50
10
815
22
29
06
132
02
70
310
172
43
10
714
21
28
05
1219
26
02
09
162
33
00
714
21
28
04
1118
25
04
1118
25
Tax T
ime
09 a
nd
Exte
rna
l C
Rs
TT09 D
esig
n C
losure
TT09 B
uild
Com
ple
te
05
1219
26
02
09
162
30
20
916
23
30
06
132
02
70
411
182
50
10
815
22
29
06
132
02
70
310
172
43
10
714
21
28
05
1219
26
02
09
162
33
00
714
21
28
04
1118
25
04
1118
25
Com
bin
ed In
com
e T
ax/T
T09 P
T
Com
bin
ed IT
/TT09 P
erf
orm
ance T
est
Corr
es &
OI D
esig
n
Form
s B
uild
Com
pany
Convers
ion d
esig
nC
onvers
ion B
uild
and T
est
AT
CF B
uild
Corr
es a
nd O
I Build
Core
& F
orm
s D
esig
n
Para
llel P
rocess
Cycle
1B
usin
ess P
ilot
Cycle
1
Para
llel P
rocess
Cycle
2B
usin
ess P
ilot
Cycle
2
Code
Refresh
Pro
ductio
n R
egre
ssio
n test
June 0
6 C
ode S
ynch
Cycle
8
UA
T d
ry
run
Perf
orm
ance T
est -
Incom
e T
ax
Go li
ve
win
dow
Pro
ductio
n C
ode F
reeze
Fix
/Regre
ss'n
as r
equired
Jan
200
9Ju
lS
ep
2010
Feb
All
except H
RR
and K
PI
Jan
20
10
Dec
Jun
200
9N
ov
AT -
Para
llel R
un
Shake
dow
n
Indiv
idual A
Tfix
12.1
112.9
Indiv
idual
AT -
Indiv
idual F
ix D
rops
12.1
0
Fix
Dro
ps
Indiv
idual
Base Y
ear
form
s
Report
s B
uild
(12.8
& 1
2.9
)
Indiv
idual P
rior
Years
form
s
Feb
Aug
Mar
Apr
Rele
ase R
eadin
ess
May
Oct
Tre
atm
ent Pla
ns B
uild
& A
T(1
2.8
& 1
2.9
& 1
2.1
0)
Tra
inin
g &
Perf
orm
ance S
upport
/ C
om
munic
atio
ns
12.8
Ind C
orr
es C
Rs
(12.8
)In
d C
orr
es A
T(1
2.8
)C
om
pany
Fix
dro
p 2
(12.7
.2)
Busin
ess P
rocess A
lignm
ent
Org
anis
atio
nal A
lignm
ent
…
Cycle
7C
ycle
6
Full
2008 II
TR
Pro
ductio
n C
ode F
reeze
HR
RK
PI
Cycle
3C
ycle
4
Cycle
6C
ycle
7
Full
2007 II
TR
Cycle
5
Co -
all
years
Convers
ion -
Indiv
idual U
pdate
s a
nd T
est
Inte
rfaces B
uild
Core
Build
Form
s B
uild
Indiv
idual
Co F
ixD
rop 3
12.7
.212.7
.3A
T -
Com
pany F
ix D
rops
Indiv
idual C
ore
Build
(12.8
& 1
2.9
, in
clu
din
g S
uper
A c
ode m
erg
e)
12.7
.1
149
Review into the Australian Taxation Office's Change Program
Inte
grat
ed P
rodu
ct T
est (
IPT)
•>
20,0
00 d
ays
of IP
Tef
fort.
•12
mon
ths
dura
tion.
•33
9 E
nd-to
-end
Bus
ines
s S
cena
rios,
incl
udin
g
•8,1
58 to
tal t
est s
teps
mad
e up
of 3
,651
prim
ary
test
ste
ps a
nd 4
,501
anc
illary
test
ste
ps.
•13
Per
form
ance
Tes
t sce
nario
s, c
over
ing
429
test
con
ditio
ns a
nd m
ultip
le d
ay in
the
life
test
s.
•30
0 se
para
te P
enal
ty &
Inte
rest
(P&
I) sc
enar
ios.
•M
ultip
le c
onve
rsio
n te
sts
acro
ss fu
ll pr
oduc
tion
data
vol
ume,
resu
lts u
sed
in IP
T, P
aral
lel R
un
and
Bus
ines
s P
ilot t
estin
g.
Key I
nteg
rate
d Pr
oduc
t Tes
t (IP
T) M
etric
s
3
150
Review into the Australian Taxation Office's Change Program
•Uni
t Tes
ting:
Tes
ting
perfo
rmed
at t
he d
iscr
ete
code
mod
ule
leve
l. It
is s
truct
ured
to te
st b
ound
ary
type
con
ditio
ns a
nd is
de
sign
ed to
test
eac
h br
anch
of l
ogic
with
in a
dis
cret
e co
de m
odul
e.
•Dis
conn
ecte
d Te
st: T
estin
g pe
rform
ed s
peci
fical
ly o
n m
odul
es th
at e
xcha
nge
or in
terfa
ce d
ata
betw
een
one
or m
ore
code
m
odul
es (e
.g. u
sing
an
Ent
erpr
ise
Appl
icat
ion
Inte
grat
ion
(EAI
) mod
ule
to e
xcha
nge
data
). It
is s
truct
ured
to te
st e
ach
path
th
roug
h a
flow
of d
ata
exch
ange
s by
sto
ppin
g at
eac
h st
ep o
f the
flow
and
exa
min
ing
the
payl
oad
of d
ata
for c
ompl
eten
ess
in
form
at a
nd c
onte
nt.
•Ass
embl
y Te
st (o
r Str
ing
Test
):Te
stin
g pe
rform
ed o
n a
grou
p of
mod
ules
or c
ode
com
pone
nts
that
mak
e up
a d
iscr
ete
func
tion
(e.g
. pos
ting
a fo
rm, e
xecu
ting
a sp
ecifi
c se
t of s
ubro
utin
es in
a b
atch
). It
is s
truct
ured
to te
st o
ne o
r mor
e (b
ut n
ot a
ll)
logi
c pa
ths
with
in th
e fu
nctio
nal a
rea
subj
ect t
o th
e te
st a
gain
st a
set
of e
xpec
ted
resu
lts.
•Int
egra
ted
Prod
uct T
est:
This
title
repr
esen
ts a
sui
te o
f tes
ting
com
pris
ed o
f the
follo
win
g te
st ty
pes:
•Pr
oduc
t Tes
t: Te
stin
g ba
sed
on s
crip
ts th
at c
over
the
entir
e in
vent
ory
of te
stco
nditi
ons
and
expe
cted
resu
lts.
Thes
e co
nditi
ons
are
base
d on
the
func
tiona
l des
igns
of t
he s
oftw
are.
It is
stru
ctur
ed in
a “f
ollo
w th
e sc
ript”
fash
ion
that
incl
udes
th
e in
put /
use
of d
ata
chos
en to
cov
er a
hig
h pe
rcen
tage
(but
not
all)
logi
c sc
enar
ios.
The
list
of s
cena
rios
was
sig
ned
off
by A
TOst
aff.
•In
tegr
atio
n Te
stin
g: S
crip
t bas
ed te
stin
g ta
rget
ed s
peci
fical
ly a
t int
erfa
ces
betw
een
ICP
and
exte
rnal
age
ncie
s (e
.g.
Cen
trelin
k, C
SA) a
s w
ell a
s ot
her i
nter
nal A
TOsy
stem
s (e
.g. T
ax R
etur
n D
atab
ase,
WIN
CAS
). Th
is te
stin
g is
scr
ipte
d m
uch
the
sam
e as
Pro
duct
Tes
t; ho
wev
er th
ese
test
s of
ten
requ
ired
spec
ial t
imin
g / f
ile h
andl
ing
proc
edur
es to
cat
er fo
r int
er-
agen
cy o
r int
er-s
yste
m te
stin
g an
d th
us it
was
trea
ted
as a
sep
arat
e ty
pe o
f tes
t.•
Lega
cy T
estin
g: T
estin
g of
Leg
acy
Syst
ems
to v
erify
cha
nges
requ
ired
by th
e m
igra
tion
of In
com
e Ta
x pr
oces
sing
in to
IC
P. T
his
test
ing
was
a c
ombi
natio
n of
scr
ipt-b
ased
and
adh
octe
stin
g co
nduc
ted
by th
e En
terp
rise
Test
org
anis
atio
nw
ithin
ES
T.
Test
Pha
se D
escr
iptio
ns
4
151
Review into the Australian Taxation Office's Change Program
•Int
egra
ted
Prod
uct T
est:
(con
tinue
d)
•Pe
rfor
man
ce T
estin
g: T
estin
g de
sign
ed to
pro
ve th
e ac
hiev
emen
t of t
hrou
ghpu
t tar
gets
der
ived
from
vol
umet
rics
prov
ided
by
the
ATO
Stra
tegy
& A
rchi
tect
ure
orga
nisa
tion.
Thi
s au
tom
ated
test
ing
exer
cise
d co
de a
t the
dis
cret
e ba
tch
/ pro
cess
leve
l, at
a “D
ay In
the
Life
”lev
el, a
nd a
t a s
tress
test
leve
l.•
Pena
lty a
nd In
tere
st R
egim
e Te
stin
g: T
his
test
ing
repr
esen
ted
a “d
eep
dive
”int
o th
e va
rious
Pen
alty
and
Inte
rest
re
gim
es w
ithin
the
acco
untin
g ar
eas
of IC
P. T
his
test
was
stru
ctur
ed fo
r the
ATO
Bus
ines
s to
test
unt
il th
ey w
ere
satis
fied
that
all
Pena
lty a
nd In
tere
st re
gim
es w
ere
verif
ied.
•Fo
rm D
efin
ition
Ver
ifica
tion:
Thi
s te
stin
g re
pres
ente
d a
“dee
p di
ve”i
nto
the
verif
icat
ion
of la
bels
, map
ping
s, a
nd
calc
ulat
ions
con
tain
ed in
the
form
def
initi
ons
that
wou
ld d
eplo
yin
the
Inco
me
Tax
Rel
ease
. •
Reg
ress
ion
Test
ing:
re-e
xecu
tion
of im
pact
ed IP
Tsc
enar
ios
follo
win
g co
de c
hang
es to
the
prod
uctio
n ca
ndid
ate
code
bas
e.
•Con
vers
ion
Test
ing:
Bro
ad ti
tle a
pplie
d to
the
suite
of t
estin
g pe
rform
ed a
s pa
rt of
the
Con
vers
ion
effo
rt w
ithin
the
Inco
me
Tax
Rel
ease
. It w
as c
ompr
ised
of:
•D
atab
ase
Test
ing:
Tes
ting
perfo
rmed
to v
erify
dat
a at
the
indi
vidu
al ta
ble
and
field
leve
l. •
Bal
ance
& R
econ
cilia
tion:
Tes
ting
to v
erify
con
verte
d ac
coun
t bal
ance
s (in
divi
dual
and
GL
leve
l) as
wel
l as
conv
erte
d fo
rm d
ata
mat
ched
the
expe
cted
resu
lts a
s de
rived
from
sour
ce d
ata.
•D
isca
rd A
naly
sis:
Tes
ting
to v
erify
that
any
dat
a w
hich
resu
lted
in a
dis
card
(err
or) f
rom
the
conv
ersi
on p
roce
ssin
g w
as id
entif
ied
as e
xpec
ted
(kno
wn
data
qua
lity
issu
e) o
r man
ually
rem
edia
ted.
•Use
r Acc
epta
nce
Test
ing:
Tes
ting
desi
gned
to p
rovi
de a
sub
set o
f end
use
rs a
n op
portu
nity
to e
xecu
te a
sub
set o
f end
-to
-end
scr
ipts
.
Test
Pha
se D
escr
iptio
ns
5
152
Review into the Australian Taxation Office's Change Program
•Pro
duct
ion
Reg
ress
ion
Test
ing:
Exe
cutio
n an
d ve
rific
atio
n of
cur
rent
pro
duct
ion
end-
to-e
nd b
usin
ess
scen
ario
s to
ve
rify
that
the
Inco
me
Tax
rele
ase
did
not i
mpa
ct c
urre
nt p
rodu
ctio
n fu
nctio
nalit
y fo
r bot
h IC
Pan
d Le
gacy
app
licat
ions
.
•Par
alle
l Run
:Exe
cutio
n an
d ve
rific
atio
n of
a s
ingl
e da
ys e
xecu
tion
in IC
Pba
sed
on d
ata
as p
roce
ssed
in to
the
lega
cy
(NTS
) sys
tem
. Th
e te
st p
roce
ss b
egan
with
a c
onve
rsio
n ru
n to
brin
gIC
Pup
to th
e da
y be
fore
the
targ
et p
aral
lel d
ay
and
then
a s
ingl
e da
ys (a
real
day
alre
ady
proc
esse
d in
NTS
) lod
gmen
ts w
ere
proc
esse
d in
to IC
P. O
nce
load
ed, t
he
batc
hes
wer
e ex
ecut
ed in
ICP
and
the
resu
lts o
f the
se b
atch
runs
on
the
acco
unts
wer
e co
mpa
red
to th
e re
sults
from
N
TS.
•Bus
ines
s Pi
lot:
This
test
ing
was
uns
crip
ted
and
follo
wed
on
from
the
Para
llel R
un a
ctiv
ity. I
t was
des
igne
d to
pro
vide
a
broa
der u
ser g
roup
an
oppo
rtuni
ty to
ver
ify b
usin
ess
proc
edur
es a
nd g
et a
“rea
l life
”fee
l for
the
new
sys
tem
. It
also
pr
ovid
ed a
n op
portu
nity
for t
he o
pera
tions
sta
ff to
test
issu
e es
cala
tion
and
com
mun
icat
ion
proc
edur
es.
•Run
Ahe
ad: T
his
activ
ity w
as le
ss a
test
and
mor
e a
conf
iden
ce b
uild
ing
/ pre
dict
ive
exer
cise
. The
run
ahea
d pr
oces
s w
as d
esig
ned
to p
redi
ct h
ow th
e pr
oduc
tion
syst
em w
ould
beh
ave
in a
pro
cess
ing
sens
e in
adv
ance
of a
ctua
lly
proc
essi
ng d
ata
into
live
pro
duct
ion.
The
Run
Ahe
ad p
roce
ss e
ssen
tially
sta
rted
load
ing
the
stoc
kpile
of i
nbou
nd fo
rms
into
a n
on-p
rodu
ctio
n en
viro
nmen
t to
give
adv
ance
inte
lligen
ce to
the
ATO
oper
atio
ns s
taff
rega
rdin
g er
ror a
nd
susp
ense
rate
s as
wel
l as
pred
ictiv
e tim
ings
.
Test
Pha
se D
escr
iptio
ns
6
153
Review into the Australian Taxation Office's Change Program
Caus
es o
f Tes
ting
Sche
dule
Delay
s
7
•Diff
icul
ty in
lock
ing
dow
n fin
al d
esig
ns fo
r com
plex
func
tion
area
s le
adin
g to
bui
ld a
nd te
st c
hang
es la
ter t
han
plan
ned
•Sho
rtage
of A
TOre
sour
ces
due
to T
ax T
ime
proj
ects
and
oth
er m
anda
tory
wor
k
•Lat
e de
liver
y of
fina
l Tax
Tim
e 20
09 re
quire
men
ts d
ue to
legi
slat
ive
requ
irem
ents
and
late
am
endm
ents
driv
ing
chan
ges
to b
uild
and
test
ing
scop
e du
ring
prod
uct t
estin
g tim
efra
mes
•Env
ironm
ent o
utag
es –
varie
ty o
f cau
ses
incl
udin
g da
ta c
entre
pow
er o
utag
es
•Inc
reas
ing
test
ing
cove
rage
to lo
wer
impl
emen
tatio
n ris
k an
d bo
lste
r use
r con
fiden
ce e
.g. P
enal
ty a
nd In
tere
st T
estin
g, a
dditi
onal
Pro
duct
test
sce
nario
s
•Und
eres
timat
ing
the
com
plex
ity o
f cer
tain
test
ing
scen
ario
s, d
riven
by:
•The
del
ays
men
tione
d ab
ove
drov
e la
ter t
han
plan
ned
build
del
iver
y pu
tting
add
ition
al p
ress
ure
on te
stin
g
•End
to e
nd b
usin
ess
scen
ario
s th
at in
clud
ed m
ultip
le in
ter-
agen
cy d
ata
exch
ange
s
•Con
duct
ing
prod
uct t
estin
g ag
ains
t tru
e co
nver
ted
data
rath
er th
an m
anuf
actu
red
data
mea
nt a
hig
h in
vest
men
t of t
ime
to fi
nd d
ata
that
wou
ld a
lign
acro
ss IC
Pan
d re
late
d sy
stem
s to
sat
isfy
com
plex
sce
nario
s
•The
end
to e
nd n
atur
e of
som
e sc
ripts
requ
ired
som
e te
st e
nviro
nmen
ts to
incl
ude
man
y in
tegr
ated
tax
syst
ems
that
whi
le p
rovi
ding
very
thor
ough
test
cov
erag
e di
d re
quire
mor
e co
mpl
ex e
nviro
nmen
tsup
port
•The
del
ays
in p
rodu
ct te
st m
entio
ned
abov
e al
so m
eant
that
whe
n pa
ralle
l run
and
bus
ines
s pi
lot c
omm
ence
d th
ey o
verla
pped
with
prod
uct t
est m
akin
g it
mor
e di
fficu
lt to
man
age
envi
ronm
ents
and
fix w
ork
acro
ss m
ore
envi
ronm
ents
•A h
ighe
r tha
n pl
anne
d nu
mbe
r of r
equi
red
lega
cy p
rodu
ctio
n ch
ange
s du
ring
the
code
free
ze w
indo
w d
rivin
g ad
ditio
nal r
etro
fit a
nd
test
ing
wor
k in
fina
l tes
ting
stag
e
154
Review into the Australian Taxation Office's Change Program
APPENDIX 8 — THE ATO’S INTEGRATED SUPPORT MODEL
155
Review into the Australian Taxation Office's Change Program
ATO
INTE
GR
ATE
D S
UP
PO
RT
MO
DE
L (fo
r the
Cha
nge
Pro
gram
Ste
erin
g C
omm
ittee
)1
vTh
e In
tegr
ated
Sup
port
Mod
el is
the
resu
lt of
bro
ad c
onsu
ltatio
n, a
pply
ing
the
lear
ning
's fr
om
prev
ious
rele
ases
and
the
posi
tive
resu
lts fr
om tr
ialli
ng th
is d
esig
n in
the
Pre
Pro
duct
ion
Pilo
t
vTh
e m
odel
will
del
iver
:
1.A
stre
amlin
ed is
sues
esc
alat
ion
proc
ess
by a
pply
ing
a bu
sine
ss fi
lter p
roce
ss
2.Ti
mel
y tra
nsfe
r of k
now
ledg
e du
e to
the
clos
e lin
ks b
etw
een
busi
ness
and
tech
nica
l sta
ff
3.A
cle
arly
def
ined
end
to e
nd p
roce
ss
4.B
ette
r int
egra
ted
supp
ort m
ater
ials
vTh
e su
ppor
t mod
el w
ill b
egin
with
the
com
men
cem
ent o
f the
Pro
duct
ion
Pilo
t.
Exe
cutiv
e S
umm
ary
156
Review into the Australian Taxation Office's Change Program
ATO
SU
PPO
RT M
OD
EL
2
¾R
evie
w a
nd
assi
gn
syst
em a
nd
desi
gn
issu
es to
En
terp
rise
Appl
icat
ion
for
reso
lutio
n
CD
Ts &
Bus
ines
s Pr
oced
ure
Team
s¾
Dev
elop
and
up
date
wor
k ar
ound
s¾
Upd
ate
proc
edur
es
¾Ke
y SE
S an
d St
ream
Lea
ds
to m
anag
e is
sues
to
reso
lutio
n a
nd a
dvis
e N
erve
Cen
tre¾
Anal
yse,
prio
ritis
e an
d lo
g is
sues
thro
ugh
INFR
A¾
Prov
ide
upda
tes
and
key
mes
sage
s to
Exp
ert u
sers
an
d Te
am L
eade
rs
¾Pe
rform
ance
sup
port
mat
eria
l upd
ates
¾M
anag
e an
d su
ppor
t th
e E
xper
t use
r ne
twor
k ¾
Dep
loym
ent
Com
mun
icat
ions
Ente
rpris
e Su
ppor
t –ES
T / C
hang
e Pr
ogra
m¾
Addr
ess
criti
cal
syst
em a
nd d
esig
n is
sues
Crit
ical
issu
es m
gt
¾D
eplo
ymen
t sig
n of
f, cr
itica
l iss
ues
cont
inge
ncy
plan
s,
inte
llige
nce
& fe
edba
ck¾
Key
mes
sage
s (in
tern
al/ e
xter
nal)
Dep
loym
ent –
maj
or
issu
es
ATO
INTE
GR
ATED
SU
PPO
RT
MO
DEL
: OVE
RVI
EWU
pdat
ed 1
4Ja
nuar
y 20
10
12,0
00
impa
cted
sta
ffC
ould
hav
e an
issu
e w
ith
the
syst
em/ a
pro
cedu
re
or h
ave
been
con
tact
ed
by a
tax
agen
t or m
embe
r of
the
com
mun
ity.
Expe
rt U
ser
For s
yste
m a
nd
proc
edur
al is
sues
.
12 Te
am L
eade
rFo
r oth
er d
eplo
ymen
t is
sues
IT R
ELEA
SE B
USI
NES
S TR
IAG
E3
ISS
UE
ESC
ALA
TIO
NIS
SU
E ID
EN
TIFI
CA
TIO
NIS
SU
E R
ES
OLU
TIO
N
SELF
-HEL
PO
N-S
ITE
SUPP
OR
T
US
E SU
PPO
RT
MA
TER
IALS
Bus
ines
s Is
sue
Man
agem
ent
Bus
ines
s fil
ter
proc
ess
to
man
age,
ana
lyse
an
d pr
iorit
ise.
C
omm
unic
ate
toal
l key
st
akeh
olde
rs
ASM
CD
T/B
PT
Ente
rpri
se
App
licat
ions
Tran
sitio
n Te
am
Res
olve
is
sue
Ner
ve
Cen
treSY
STEM
ISSU
E
CD
Ts/ B
PTs
Upd
ate
proc
edur
es a
nd
wor
k ar
ound
sPR
OC
EDU
RAL
ISSU
E
Bus
ines
s Is
sues
Man
agem
ent
AN
ALY
SIS
AN
D P
RIO
RIT
ISA
TIO
N
Crit
ical
is
sues
ES
CA
LATE
CH
ANG
E R
EQU
ESTS
INFR
A
ES
CA
LATE
EA
INTE
LLIG
ENC
E
Ner
ve C
entr
e
Non
-crit
ical
issu
ePr
iorit
ise
in c
onsu
ltatio
n w
ith B
IMT
600
expe
rt u
sers
Tran
sitio
n Te
am
INFR
A
INFR
A
IT R
elea
se
Con
tinge
ncy
Foru
m
¾M
anag
e In
com
e Ta
x R
elea
se c
ontin
genc
y st
rate
gy a
nd s
uppo
rt N
erve
Cen
tre
Inco
me
Tax
Rel
ease
C
ontin
genc
y Fo
rum
Sta
ff w
ill b
e ke
pt
info
rmed
by
thei
r exp
ert
user
/team
lead
er v
ia
Bus
ines
s Is
sues
M
anag
emen
t Tea
m,
ES
T al
erts
and
onl
ine
issu
es /
wor
k ar
ound
s re
gist
er.
Key
Rol
es
AS
M
Bul
k em
ail.
Rat
io1
expe
rt us
er:2
0st
aff
IT R
elea
se
Seni
or
Lead
ersh
ip
PEO
PLE
/ CU
LTU
RAL
&
TR
AIN
ING
ISSU
ESB
usin
ess
to m
anag
e
157
Review into the Australian Taxation Office's Change Program
ATO
SU
PPO
RT M
OD
EL
3
¾A
dvic
e on
sys
tem
de
sign
and
op
erat
ion
¾A
ssis
tanc
e w
ith
issu
e an
alys
is/
clas
sific
atio
n
¾A
dvic
e on
sys
tem
op
erat
ion
and
usag
e¾
Ass
ista
nce
with
issu
e an
alys
is/ c
lass
ifica
tion
¾D
evel
op a
nd u
pdat
e w
ork
arou
nds
¾U
pdat
e pr
oced
ures
¾A
naly
se, p
riorit
ise
and
log
issu
es th
roug
h IN
FRA
¾M
anag
e fe
edba
ck a
nd
inte
llige
nce
–ca
scad
e to
BS
L fo
r act
ion
as re
quire
d¾
Sup
port
team
lead
ers
and
expe
rt us
ers
¾S
olut
ion
advi
ce
¾P
rovi
de u
pdat
es a
nd
mes
sage
s to
key
st
akeh
olde
rs
¾N
ews
Ale
rts¾
Per
form
ance
su
ppor
t mat
eria
l up
date
s¾
Man
age
and
supp
ort t
he E
xper
t us
er n
etw
ork
¾D
eplo
ymen
t C
omm
unic
atio
ns
ATO
INTE
GR
ATED
SU
PPO
RT
MO
DEL
: IN
CO
ME
TAX
REL
EAS
E B
USI
NES
S TR
IAG
EU
pdat
ed 1
4 Ja
nuar
y 20
10
Expe
rt U
ser
For s
yste
m a
nd
proc
edur
al is
sues
.
2 Team
Lea
der
For o
ther
de
ploy
men
t is
sues
Inco
me
Tax
Rel
ease
Bus
ines
s Tr
iage
3
ISS
UE
ESC
ALA
TIO
N
ON
-SIT
E SU
PPO
RT
Cor
e D
eplo
ymen
t Te
ams
Bus
ines
s So
lutio
ns a
nd
Cha
nge
Prog
ram
D
esig
n Le
ads
Bus
ines
s Is
sue
Man
agem
entT
eam
AN
ALY
SIS
AN
D P
RIO
RIT
ISA
TIO
NIS
SU
E ID
EN
TIFI
CA
TIO
N
¾P
rovi
de te
chni
cal a
nd b
usin
ess
impa
ct a
dvic
e an
d su
ppor
t the
BIM
T pr
oces
s¾
Inpu
t to
deve
lopi
ng w
ork
arou
nds
CO
MM
UN
ICA
TE
ES
CA
LATE
Bus
ines
s Pr
oced
ure
Team
s
Cha
nge
Prog
ram
/ ES
T
Inco
me
Tax
Rel
ease
Bus
ines
s Tr
iage
sup
port
ed b
y:
¾A
naly
se &
prio
ritis
e is
sues
and
in
telli
genc
e (in
tern
al a
nd e
xter
nal)
as th
ey r
elat
e to
the
IT R
elea
se¾
Esc
alat
e cr
itica
l iss
ues
and
mak
e re
com
men
datio
ns to
Ner
ve C
entre
¾D
eplo
ymen
t sig
n of
f¾
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rdin
ate
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lopm
ent o
f key
m
essa
ges
and
com
mun
icat
ions
(in
tern
al/ e
xter
nal)
Subj
ect m
atte
r exp
erts
Inco
me
Tax
Rel
ease
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ior
Lead
ersh
ip G
roup
ES
CA
LATE
CO
MM
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ICA
TE
Ner
ve c
entr
e
Upd
ates
from
:In
com
e Ta
x Se
nior
M
anag
emen
t G
roup
158
Review into the Australian Taxation Office's Change Program
Met
hodo
logy
for i
ssue
iden
tific
atio
n, e
scal
atio
n an
d re
solu
tion
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taff
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n is
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ater
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xper
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ILD
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d) a
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l util
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r use
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rts
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CE
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ve C
entr
e
COMMUNICATION
ANALYSEPRIORITISESIGN OFF
PRO
DU
CT
OW
NER
ISS
UES
M
AN
AG
EMEN
TLE
AD
EST
5. IT
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ease
Se
nior
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ader
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roup
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erve
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tre
ISS
UES
M
AN
AG
EMEN
TES
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CA
TEG
OR
ISE
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IOR
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E
INTELLIGENCEeg CSS &TPALs
CR
ITIC
ALIS
SUES
ATO
F
CO
MPL
IAN
CE
Use
of I
ntel
ligen
ce
5
Upd
ated
14
Janu
ary
2010
OPE
RA
TIO
NS
159
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APPENDIX 9 — THE ATO’S SUMMARY OF EXTERNAL
READINESS AND INTELLIGENCE KNOWLEDGE (ERIK) REPORTING FROM JANUARY TO APRIL 2010
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)1
TAB
LE O
F C
ON
TEN
TS
Tabl
e of
con
tent
s
Dat
e:[N
ames
del
eted
]
Aut
hor:
[Nam
es d
elet
ed]
Rev
iew
ers:
[Nam
es d
elet
ed]
Cre
ated
Dat
e:20
May
201
0
Last
Edi
ted:
20 M
ay 2
010
Dis
tribu
tion
List
:[N
ames
del
eted
]TP
ALS
Exe
cutiv
e
Sign
-Off/
Appr
oval
:[N
ames
del
eted
]D
ate:
Doc
umen
t con
trol
Vers
ion
cont
rol
Dra
ft p
repa
red
[Nam
es d
elet
ed]
20/0
5/10
1.1
Ver
sion
Rev
isio
n da
teN
ame
of m
odifi
erC
omm
ents
Page
Sect
ion
1 –
Exec
utiv
e su
mm
ary
3P
urpo
se o
f thi
s re
port
4
Met
hodo
logy
4
Bac
kgro
und
4
Key
dat
es6
Key
find
ings
6
Com
mun
ity im
pact
s8
ATO
act
ion
8
Sect
ion
2 –
Mon
thly
sna
psho
ts9
Janu
ary/
Febr
uary
201
010
Mar
ch 2
010
11
Apr
il 20
1012
Sect
ion
3 –
Com
plai
nts
13A
TO c
ompl
aint
s14
App
endi
x A
16E
xam
ple
–E
RIK
cor
pora
te d
ashb
oard
repo
rt17
Rel
ated
doc
umen
ts
[Nam
es d
elet
ed]
TBA
3. In
tern
al R
eadi
ness
(TB
C)
[Nam
es d
elet
ed]
TBA
2. B
IM (T
BC
)
[Nam
es d
elet
ed]
TBA
1. E
xter
nal C
omm
unic
atio
n R
epor
t
Doc
umen
t titl
eD
ate
Aut
hor
Dis
clai
mer
This
repo
rt hi
ghlig
hts
inci
dent
s an
d ra
w in
telli
genc
e w
hich
is a
s ye
t to
be v
erifi
ed a
nd s
houl
d no
t nec
essa
rily
be s
een
as
repr
esen
tativ
e th
is s
tage
.
162
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)2
SEC
TIO
N 1
-EX
ECU
TIVE
SU
MM
AR
Y
SEC
TIO
N O
NE
EXEC
UTI
VE S
UM
MA
RY
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)3
SEC
TIO
N 1
-EX
ECU
TIVE
SU
MM
AR
Y
Purp
ose
of th
is re
port
This
repo
rt pr
ovid
es a
con
solid
ated
vie
w o
f the
com
mun
ity fe
edba
ck re
ceiv
ed in
rela
tion
to th
e A
ustra
lian
Taxa
tion
Offi
ce (A
TO) C
hang
e P
rogr
am (R
elea
se 3
) Inc
ome
Tax
depl
oym
ent.
The
repo
rt:
§hi
ghlig
hts
the
‘key
topi
cs’w
hich
gen
erat
ed m
ost e
nqui
ries
§su
mm
aris
es th
e co
mm
unity
impa
cts
iden
tifie
d, a
nd
§pr
ovid
es a
hig
h le
vel i
nsig
ht in
to th
e A
TO’s
resp
onse
to th
e co
mm
unity
feed
back
pro
vide
d.
Bac
kgro
und
Cha
nge
Pro
gram
Rel
ease
3 w
as th
e la
rges
t and
mos
t com
plex
info
rmat
ion
tech
nolo
gy d
eplo
ymen
t eve
r und
erta
ken
by
the
ATO
. It w
as b
roke
n up
into
sta
ges,
spr
ead
over
a n
umbe
r of y
ears
, to
min
imis
e ris
k, m
inim
ise
impa
ct o
n th
e co
mm
unity
, and
allo
w p
olic
y an
d le
gisl
ativ
e ch
ange
s to
be
inco
rpor
ated
1
(as
illust
rate
d be
low
).
An
Ext
erna
l Rea
dine
ss In
tellig
ence
and
Kno
wle
dge
(ER
IK) m
odel
was
dev
elop
ed a
nd im
plem
ente
d to
:§
ensu
re th
e kn
owle
dge
gath
ered
(dur
ing
the
Cha
nge
Pro
gram
Rel
ease
3 d
eplo
ymen
t) w
as c
aptu
red
and
shar
ed e
ffect
ivel
y §
enab
le th
e ra
pid
iden
tific
atio
n of
sig
nific
ant r
isks
and
issu
esim
pact
ing
on th
e co
mm
unity
, and
§su
ppor
t the
ATO
’s s
enio
r exe
cutiv
e in
dec
isio
n m
akin
g to
add
ress
the
issu
es ra
ised
.
FBT
April
2008
Supe
rann
uatio
n20
08-2
009
Inte
rpre
tive A
ssist
ance
an
d Fi
rst H
ome S
aver
Ac
coun
ts
July
2009
INC
OM
E TA
X
Janu
ary
2010
Tax t
ime
July
2010
1S
ourc
e: J
S 1
6043
-03.
2010
The
Aus
tralia
n Ta
xatio
n O
ffice
Cha
nge
Pro
gram
ER
IK p
rovi
ded
an in
tegr
ated
, end
-to-e
nd m
odel
, whi
ch e
nabl
ed c
omm
unity
feed
back
to b
e ca
ptur
ed, a
naly
sed
and
repo
rted
to th
e A
TO’s
sen
ior d
ecis
ion
mak
ers.
The
ER
IK m
odel
con
sist
ed o
f thr
ee k
ey e
lem
ents
:§
activ
ities
to g
athe
r com
mun
ity fe
edba
ck§
colla
bora
tive
disc
ussi
ons
and
anal
ysis
of t
he d
ata
to u
nder
stan
d th
e im
pact
s, a
nd§
repo
rting
.
Gat
herin
g co
mm
unity
feed
back
A ra
nge
of e
ngag
emen
t and
obs
erva
tion
capt
ure
activ
ities
wer
e un
derta
ken
to e
nsur
e th
e qu
ick
iden
tific
atio
n of
issu
es
impa
ctin
g on
the
com
mun
ity.
This
incl
uded
:§
Cha
nge
Pro
gram
Con
sulta
tive
Gro
up (C
PCG
). Th
e C
PC
G w
as c
haire
d by
Ann
amar
ia C
arey
, Ass
ista
nt C
omm
issi
oner
Cha
nge
Pro
gram
Ext
erna
l R
eadi
ness
and
con
sist
ed o
f rep
rese
ntat
ives
from
key
pro
fess
iona
l acc
ount
ing
asso
ciat
ions
. It w
as fo
rmed
to:
-ens
ure
an a
ppro
pria
te le
vel o
f eng
agem
ent a
nd c
omm
unic
atio
n w
ith th
e ke
y pr
ofes
sion
al a
ccou
ntin
gas
soci
atio
ns, a
nd-f
acilit
ate
the
timel
y co
llect
ion
of fe
edba
ck.
§Fe
edba
ck fr
om e
stab
lishe
d A
TO /
tax
prac
titio
ner f
orum
mem
bers
and
sec
reta
riats
.§
Feed
back
from
tax
prac
titio
ners
via
Rel
atio
nshi
p M
anag
er fi
eld
visi
ts a
nd o
utbo
und
phon
e ca
lls.
§A
naly
sis
of c
all a
nd c
ompl
aint
dat
a§
Mon
itorin
g a
sam
ple
of in
boun
d ca
lls re
ceiv
ed in
the
ATO
’s c
all c
entre
s§
Deb
riefin
g fro
ntlin
e st
aff
§Fe
edba
ck fr
om k
ey A
TO b
usin
ess
lines
(inc
ludi
ng C
usto
mer
Ser
vice
s an
d S
olut
ions
, Mic
ro E
nter
pris
es a
ndIn
divi
dual
s, L
arge
Bus
ines
s an
d In
tern
atio
nal,
Tax
Pra
ctiti
oner
and
Lod
gmen
t Stra
tegy
, Sm
all a
nd M
ediu
mE
nter
pris
es, M
edia
Uni
t and
ATO
com
plai
nts)
. Eac
h ar
ea n
omin
ated
a p
erso
n (k
now
ledg
e of
ficer
), re
spon
sibl
efo
r:-c
oord
inat
ing
and
whe
re re
quire
d, u
nder
taki
ng th
e fe
edba
ck g
athe
ring
activ
ities
for t
heir
area
s-r
epor
ting
thei
r fin
ding
s, a
nd
-par
ticip
atin
g in
col
labo
rativ
e di
scus
sion
s to
bui
ld a
cor
pora
teun
ders
tand
ing
of th
e im
pact
s th
e de
ploy
men
tw
as h
avin
g on
the
com
mun
ity.
Und
erst
andi
ng th
e im
pact
s
A k
ey c
ompo
nent
of t
he E
RIK
mod
el w
as th
e es
tabl
ishm
ent o
f a c
ross
bus
ines
s lin
e, k
now
ledg
e ne
twor
k. T
his
netw
ork
cons
iste
d of
bus
ines
s lin
e kn
owle
dge
offic
ers
and
a co
rpor
ate
know
ledg
e in
tegr
ator
. The
y m
et b
y ph
one
hook
-up
on a
dai
ly
basi
s to
sha
re a
nd d
iscu
ss th
eir f
indi
ngs/
obse
rvat
ions
and
to b
uild
a c
orpo
rate
vie
w a
nd u
nder
stan
ding
of t
he c
omm
unity
im
pact
s. T
hese
con
vers
atio
ns a
ssis
ted
the
exte
rnal
read
ines
s te
am to
qui
ckly
iden
tify
pote
ntia
l sys
tem
ic is
sues
and
tren
ds.
Rep
ortin
g
The
know
ledg
e in
tegr
ator
col
late
d an
d an
alys
ed th
e co
ntrib
utio
nspr
ovid
ed b
y th
e bu
sine
ss li
ne k
now
ledg
e of
ficer
s on
a
daily
bas
is.
The
outp
ut fr
om th
is p
roce
ss w
as th
e de
velo
pmen
t of a
cor
pora
te E
RIK
das
hboa
rd re
port.
The
repo
rt w
as
prod
uced
dai
ly fr
om 2
8 Ja
nuar
y 20
10, w
ith th
e fre
quen
cy s
hifti
ngto
twic
e w
eek
in M
arch
. The
cor
pora
te E
RIK
das
hboa
rd
repo
rt pr
ovid
ed a
con
solid
ated
, cor
pora
te v
iew
of t
he c
omm
unity
impa
cts
of th
e de
ploy
men
t. It
was
circ
ulat
ed to
key
st
akeh
olde
rs (s
peci
fical
ly, t
he A
TO’s
‘Ner
ve C
entre
’) to
:§
info
rm th
em o
f the
feed
back
pro
vide
d§
assi
st th
e A
TO’s
sen
ior e
xecu
tive
in d
ecis
ion
mak
ing
proc
esse
s, a
nd§
trigg
er a
ppro
pria
te A
TO re
spon
ses/
actio
n.
Met
hodo
logy
This
repo
rt ha
s be
en c
ompi
led
usin
g th
e da
ta fr
om th
e E
xter
nal R
eadi
ness
Inte
lligen
ce a
nd K
now
ledg
e (E
RIK
) da
shbo
ard
repo
rts w
hich
wer
e pr
epar
ed d
urin
g th
e pe
riod
28 J
anua
ry 2
010
to 3
0 A
pril
2010
.R
efer
to ‘B
ackg
roun
d’be
low
for d
etai
ls o
n ho
w th
e E
RIK
das
hboa
rd re
ports
wer
e pr
oduc
ed.
This
repo
rt pr
ovid
es a
mon
thly
sum
mar
y of
:§
key
issu
es (i
nclu
ding
det
ails
of t
he m
ost f
requ
ently
ask
ed to
pics
)§
com
plai
nts
rece
ived
, and
§
com
mun
ity im
pact
s.
Com
men
tary
abo
ut th
e ‘to
ne’o
f enq
uirie
s ha
s be
en in
clud
ed to
illu
stra
te th
e sh
iftin
g co
mm
unity
atti
tude
s to
war
ds th
e A
TO. R
efer
ence
to th
e in
tern
al ‘r
atin
g’of
the
proj
ect h
as b
een
incl
uded
to d
emon
stra
te t
he c
orre
latio
n be
twee
n th
e ris
ing
com
mun
ity c
once
rns
and
the
stat
us o
f the
pro
ject
.
Due
to th
e sp
ecifi
c ris
ks a
ssoc
iate
d w
ith la
rge
corp
orat
es, t
his
feed
back
is re
porte
d se
para
tely
.
164
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)4
SEC
TIO
N 1
-EX
ECU
TIVE
SU
MM
AR
Y
It is
impo
rtant
to n
ote
that
the
ER
IK m
odel
ope
rate
d in
par
alle
lwith
the
inte
rnal
issu
es e
scal
atio
n pr
oces
s (a
s illu
stra
ted
in th
e di
agra
m b
elow
). Th
e E
RIK
pro
cess
pro
vide
d qu
alita
tive
info
rmat
ion
to a
ssis
t dec
isio
n m
aker
s in
:
§de
velo
ping
an
unde
rsta
ndin
g of
the
brea
dth
and
dept
h of
the
com
mun
ity im
pact
s, a
nd
§pr
iorit
isin
g th
e re
solu
tion
of is
sues
hav
ing
an im
pact
.
Issu
es
BS
L K
now
ledg
e C
o-or
dina
tor
CO
MM
UN
ICAT
ION
Infr
a an
d sy
stem
m
anag
emen
tpr
oces
s
Key
bus
ines
s ar
eas
S&
ME
CS&
STP
ALS
ATO
Com
plai
nts
ME
&I
LB&
I
Kno
wle
dge
Net
wor
k
Inte
llige
nce
&
Kno
wle
dge
gath
ered
fro
m k
ey B
SL’
s.
Kno
wle
dge
Rep
ortin
g
(ER
IK C
orpo
rate
Das
hboa
rd
repo
rts)
Cor
pora
te
Exec
utiv
e /
Ner
ve C
entr
e
Exte
rnal
info
rmat
ion
chan
nels
Con
sulta
tions
Pho
neFi
eld
visi
tsC
orre
spon
denc
e
EXTE
RN
AL
BS
L co
ordi
nato
rs
INTE
RN
AL
BS
L pr
oduc
t coo
rdin
ator
s
Sta
ff
INTE
RN
AL
REA
DIN
ESS
EXTE
RN
AL
REA
DIN
ESS
INTE
LLIG
ENC
E &
KN
OW
LED
GE
Rep
ortin
g (e
g B
usin
ess
Issu
es
Man
agem
ent)
Kno
wle
dge
Inte
grat
or
Tax
Com
mun
ity
Dec
isio
n m
akin
g
Para
llel p
roce
sses
Feed
back
to c
ontri
buto
rs
CS&
S
Cus
tom
er S
ervi
ce a
nd S
olut
ions
TPA
LS T
ax P
ract
ition
er a
nd L
odgm
ent S
trate
gy
LB&
I
Lar
ge B
usin
ess
and
Inte
rnat
iona
l
ME
&I
M
icro
Ent
erpr
ises
and
Indi
vidu
als
S&
ME
S
mal
l and
Med
ium
Ent
erpr
ises
Med
ia u
nit
165
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)5
SEC
TIO
N 1
-EX
ECU
TIVE
SU
MM
AR
Y
Key
dat
es2
The
timel
ine
belo
w h
ighl
ight
s th
e ke
y da
tes
thro
ugho
ut th
e de
ploy
men
t and
illu
stra
tes
the
shift
ing
ER
IK p
roje
ct
stat
us.
Key
find
ings
Initi
ally
, the
re a
ppea
red
to b
e a
leve
l of a
ccep
tanc
e an
d un
ders
tand
ing
abou
t the
com
plex
ity o
f the
cha
nge
and
the
chal
leng
es b
eing
face
d. H
owev
er, f
rust
ratio
ns s
tarte
d to
em
erge
mid
Feb
ruar
y as
peo
ple
bega
n to
ex
perie
nce
the
flow
on
and
finan
cial
impa
cts
of th
e pr
oces
sing
del
ays.
The
se fr
ustra
tions
esc
alat
ed o
ver t
ime
and
this
was
refle
cted
in a
ste
ady
upw
ard
trend
in c
ompl
aint
s (a
s illu
stra
ted
in th
e di
agra
ms
oppo
site
). 1.
Tax
pra
ctiti
oner
aw
aren
ess
and
unde
rsta
ndin
g of
the
Cha
nge
Pro
gram
dep
loym
ent
Alth
ough
tax
prac
titio
ners
app
eare
d to
hav
e a
high
aw
aren
ess
of th
e C
hang
e P
rogr
am d
eplo
ymen
t, fe
edba
ck th
roug
hout
the
depl
oym
ent s
ugge
sted
that
som
e pr
actit
ione
rs d
id n
ot fu
lly u
nder
stan
d th
e sc
ope
of th
e ch
ange
(spe
cific
ally
, the
leng
th o
f tim
e fo
r whi
ch A
TO s
yste
ms
wou
ld b
e af
fect
ed) a
nd
the
ongo
ing
impa
cts
this
wou
ld h
ave
on th
eir p
ract
ices
.
2. C
omm
unic
atio
nIn
rega
rds
to c
omm
unic
atio
n, th
ere
was
som
e on
goin
g cr
itici
sm fr
om ta
x pr
actit
ione
rs a
bout
the
lack
of
info
rmat
ion
prov
ided
by
the
ATO
:§
dire
ctly
to th
e ge
nera
l pub
lic (v
ia th
e ge
nera
l med
ia),
and
§ab
out t
he is
sues
/ pr
oces
sing
del
ays
(incl
udin
g C
entre
link
issu
es).
3. P
rimar
y co
ncer
nsD
urin
g th
e pe
riod
(28/
01/1
0 –
21/0
4/10
), th
e pr
imar
y co
ncer
ns ra
ised
wer
e:§
Pro
cess
ing
dela
ys -
prog
ress
of r
etur
n (P
OR
) enq
uirie
s.
Rai
sed
by b
oth
taxp
ayer
s an
d ta
x pr
actit
ione
rs§
Issu
es re
latin
g to
the
Tax
Age
nt P
orta
l (in
clud
ing
diffi
culti
esin
acc
essi
ng th
e P
orta
l and
inab
ility
to p
erfo
rm fu
nctio
ns w
ithin
the
Por
tal).
Rai
sed
by ta
x pr
actit
ione
rsIn
Apr
il, th
ere
was
a n
otab
le in
crea
se in
the
volu
me
of e
nqui
ries
rela
ting
to th
e N
otic
e of
Ass
essm
ent
(NO
A) /
Sta
tem
ent o
f Acc
ount
(SO
A) c
orre
spon
denc
e.
This
issu
e pr
imar
ily w
as ra
ised
by
tax
prac
titio
ners
.2
Sou
rce:
JS
160
43-0
3.20
10 T
he A
ustra
lian
Taxa
tion
Offi
ce C
hang
e P
rogr
am
Activities
Nea
ring
ambe
r
Pro
duct
ion
pilo
t
1 Fe
b
Gre
en
ERIK -project status
Ret
urne
d to
nor
mal
pr
oces
sing
turn
arou
nds
Tran
sfer
ta
xpay
er
reco
rds
Pro
cess
ing
of
Inco
me
Tax
retu
rns
bega
n
Pro
gres
sive
ly in
crea
sed
num
ber o
f re
turn
s pr
oces
sed
24 J
an12
Feb
15 F
eb1
Mar
29 M
ar28
Jan
24 F
eb18
Feb
Am
ber
Red
1340
Tota
l
19O
mbu
dsm
an In
v.
20A
TO R
evie
w
452
TPS
Man
aged
849
BS
L M
anag
ed
Feb
10Pr
oduc
t
Com
plai
nts
rece
ived
–Fe
brua
ry 2
010
1133
Tota
l
7O
mbu
dsm
an In
v.
21A
TO R
evie
w
386
TPS
Man
aged
725
BS
L M
anag
ed
Feb
10Pr
oduc
t
Com
plai
nts
final
ised
–Fe
brua
ry 2
010
3994
Tota
l
20O
mbu
dsm
an In
v.
27A
TO R
evie
w
2165
TPS
Man
aged
1782
BS
L M
anag
ed
Mar
10
Prod
uct
Com
plai
nts
rece
ived
–M
arch
201
0
1574
Tota
l
20O
mbu
dsm
an In
v.
20A
TO R
evie
w
476
TPS
Man
aged
1058
BS
L M
anag
ed
Mar
10
Prod
uct
Com
plai
nts
final
ised
–M
arch
201
0
8731
Tota
l
29O
mbu
dsm
an In
v.
24A
TO R
evie
w
6736
TPS
Man
aged
1942
BS
L M
anag
ed
April
10
Prod
uct
Com
plai
nts
rece
ived
–Ap
ril 2
010
5505
Tota
l
12O
mbu
dsm
an In
v.
26A
TO R
evie
w
3586
TPS
Man
aged
1881
BS
L M
anag
ed
April
10
Prod
uct
Com
plai
nts
final
ised
–Ap
ril 2
010
ATO
com
plai
nts
rece
ived
and
fina
lised
–by
pro
duct
, by
mon
th
The
tabl
es b
elow
sho
w th
e co
mpl
aint
s re
ceiv
ed a
nd fi
nalis
ed –
by p
rodu
ct a
nd m
onth
.
166
Review into the Australian Taxation Office's Change Program
IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)6
SEC
TIO
N 1
-EX
ECU
TIVE
SU
MM
AR
Y
ATO
com
plai
nts
rece
ived
–cu
mul
ativ
e, b
y pr
oduc
t
The
grap
hs b
elow
illu
stra
te th
e cu
mul
ativ
e co
mpl
aint
s re
ceiv
ed a
nd fi
nalis
ed, b
y pr
oduc
t, d
urin
g th
e pe
riod
1Feb
ruar
y to
30
Apr
il.
Co
mp
lain
ts R
ece
ive
d -
Cu
mu
lati
ve
fro
m 1
Fe
b
0
2000
4000
6000
8000
10000
12000
14000
1-Fe
b8-
Feb
15-F
eb22-
Feb
29 F
eb7-
Mar
14-M
ar21
-Mar
28-
Mar
4-A
pr
11-
Apr
18-A
pr25
-Apr
2010
2009
2008
30 A
pril
25 A
pril
18 A
pril
11 A
pril
4 A
pril
28 M
arch
21 M
arch
Dat
e(a
s at
)
2635
1943
1340
1049
700
4160
Cum
ulat
ive
tota
l(c
ompl
aint
s re
ceiv
ed)
1406
5
1232
9
9580
7075
5631
4520
3376
Cum
ulat
ive
tota
l(c
ompl
aint
s re
ceiv
ed)
14 M
arch
7 M
arch
29 F
ebru
ary
22 F
ebru
ary
15 F
ebru
ary
8 Fe
brua
ry
1 Fe
brua
ry
Dat
e(a
s at
)
Co
mp
lain
ts R
ec
eiv
ed
Cu
mu
lati
ve
fro
m 1
Fe
b 2
01
0
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
01 F
eb
08 F
eb
15 F
eb
22 F
eb
01 M
ar
08 M
ar
15 M
ar
22 M
ar
29 M
ar
05 A
pr
12 A
pr
19 A
pr
26 A
pr
AT
O R
evi
ew
BS
L M
an
ag
ed
Om
bu
ds
ma
nT
PS
Ma
na
ge
d
ATO
com
plai
nts
rece
ived
–cu
mul
ativ
e
The
grap
h an
d ta
ble
belo
w il
lust
rate
the
cum
ulat
ive
com
plai
nts
rece
ived
dur
ing
the
perio
d 1F
ebru
ary
to 3
0 A
pril.
The
gra
ph a
lso
prov
ides
com
para
tive
data
aga
inst
pre
viou
sye
ars.
The
re w
as a
not
able
incr
ease
in th
e vo
lum
e of
com
plai
nts
rece
ived
dur
ing
Apr
il.
Com
plai
nts
Fina
lised
Cum
ulat
ive
from
1 F
eb 2
010
0
500
1000
1500
2000
2500
3000
3500
4000
4500
01 Feb
08 Feb
15 Feb
22 Feb
01 Mar
08 Mar
15 Mar
22 Mar
29 Mar
05 Apr
12 Apr
19 Apr
26 Apr
ATO
Rev
iew
BSL
Man
aged
Om
buds
man
TPS
Man
aged
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Review into the Australian Taxation Office's Change Program
IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)7
SEC
TIO
N 1
-EX
ECU
TIVE
SU
MM
AR
Y
Com
mun
ity im
pact
sA
TO a
ctio
nTh
e A
TO im
plem
ente
d va
rious
pro
cedu
res
and
mec
hani
sms
for i
dent
ifyin
g, e
scal
atin
g an
d re
solv
ing
issu
es im
pact
ing
on
the
exte
rnal
com
mun
ity. A
s is
sues
bec
ame
evid
ent,
cont
inge
ncy
plan
s w
ere
invo
ked
acro
ss th
e A
TO, i
nclu
ding
:
§sh
iftin
g re
sour
ces
to a
ssis
t with
pro
cess
ing
back
logs
, iss
ues
man
agem
ent,
onlin
e su
ppor
t and
adm
inis
terin
gfin
anci
al h
ards
hip
case
s.
§en
gagi
ng n
on-o
ngoi
ng s
taff
to p
roce
ss it
ems
susp
ende
d in
ICP
§co
nduc
ting
outb
ound
cal
l cam
paig
ns to
tax
prac
titio
ners
for g
roup
s of
taxp
ayer
s af
fect
ed b
y sp
ecifi
c is
sues
§ce
asin
g th
e ap
plic
atio
n of
Fai
lure
to L
odge
pen
alty
for t
he p
erio
d 1
Apr
il to
30
Apr
il 20
10 fo
r IT
retu
rns
due
31 M
arch
201
0.3
For f
urth
er d
etai
ls o
f the
ATO
’s in
tern
al re
adin
ess
activ
ities
, ref
er to
the
Inte
rnal
Rea
dine
ss re
port.
Fina
ncia
l har
dshi
p
The
ATO
has
bee
n w
orki
ng h
ard
to e
nsur
e pe
ople
exp
erie
ncin
g ge
nuin
e fin
anci
al h
ards
hip
rece
ive
thei
r ref
unds
. In
Dav
id B
utle
r’s u
pdat
e (p
ublis
hed
to a
to.g
ov.a
u on
20
Apr
il 20
10),
he a
nnou
nced
that
we
have
hel
ped
over
1,0
00 p
eopl
e w
ho w
ere
in th
is s
ituat
ion4
.
Sys
tem
issu
es
Alth
ough
ther
e w
ere
no ‘c
ritic
al’s
yste
m p
robl
ems,
a h
igh
volu
me
of s
yste
m is
sues
wer
e id
entif
ied
thro
ugho
ut th
e de
ploy
men
t. Th
e A
TO’s
Bus
ines
s Is
sues
Man
agem
ent p
roce
ss w
as u
sed
to p
riorit
ise,
trac
k, m
anag
e an
d re
solv
e th
ese
issu
es.
Des
ign
issu
esIn
Apr
il, th
ere
was
a n
otab
le in
crea
se in
the
volu
me
of e
nqui
ries
rela
ting
to th
e de
sign
of t
he N
otic
e of
Ass
essm
ent
(NO
A) /
Sta
tem
ent o
f Acc
ount
(SO
A) c
orre
spon
denc
e. N
egat
ive
feed
back
was
bei
ng re
ceiv
ed fr
om b
oth
tax
prac
titio
ners
and
taxp
ayer
s. T
hese
con
cern
s w
ere
note
d an
d es
cala
ted.
As
a re
sult,
the
ATO
org
anis
ed a
wor
ksho
p w
ith a
gent
and
sof
twar
e in
dust
ry re
pres
enta
tives
on
23rd
Mar
ch 2
010.
At t
his
wor
ksho
p, a
ser
ies
of p
ropo
sed
desi
gns
wer
e ite
rativ
ely
test
ed w
ith p
artic
ipan
ts a
nd th
e ou
tcom
es u
sed
to d
evel
op p
roto
type
s. E
xter
nal u
sabi
lity
test
ing
of th
ese
prot
otyp
es (d
irect
ly w
ith ta
xpay
ers)
occ
urre
d be
twee
n 13
than
d 19
thA
pril5
. As
a re
sult,
it is
env
isag
ed th
at c
hang
es w
ill be
mad
e to
thes
e st
atem
ents
. Thi
s is
an
exce
llent
exa
mpl
e of
the
ATO
’s a
bilit
y to
be
adap
tive,
col
labo
rativ
e an
d re
spon
sive
to th
e co
ncer
ns o
f the
com
mun
ity.
Com
mun
icat
ion
The
Cha
nge
Pro
gram
Con
sulta
tive
Gro
up w
as a
ctiv
ely
enga
ged
thro
ugho
ut th
e de
ploy
men
t, w
ith n
ine
mee
tings
oc
curr
ing
to d
ate.
Mem
bers
wer
e pr
ovid
ed w
ith re
gula
r upd
ates
on
the
stat
us o
f the
dep
loym
ent a
nd a
n op
portu
nity
to
disc
uss
issu
es o
r rai
se c
once
rns.
The
ATO
pro
vide
d re
gula
r upd
ates
to ta
x pr
actit
ione
rs -
via
the
exis
ting
com
mun
icat
ion
chan
nels
(inc
ludi
ng e
Link
, bro
adca
sts
and
ato.
gov.
au).
For f
ull d
etai
ls o
f the
com
mun
icat
ion
activ
ities
un
derta
ken,
refe
r to
the
Ext
erna
l Com
mun
icat
ion
repo
rt.
Ther
e w
as re
gula
r com
mun
icat
ion
betw
een
the
ATO
and
Cen
trelin
k. In
itial
ly, p
hone
hoo
k-up
s oc
curr
ed d
aily
, with
the
frequ
ency
late
r cha
ngin
g to
app
roxi
mat
ely
thre
e tim
es p
er w
eek.
Pho
ne h
ook-
ups
wer
e al
so c
ondu
cted
bet
wee
n th
e A
TO a
nd C
hild
Sup
port
Age
ncy,
as
requ
ired.
The
com
mun
ity im
pact
s re
sulti
ng fr
om th
e R
elea
se 3
Inco
me
Tax
depl
oym
ent c
an b
e br
oadl
y ca
tego
rised
into
four
ar
eas:
§Fi
nanc
ial /
cas
h flo
w im
pact
s (fo
r bot
h ta
x pr
actit
ione
rs a
nd ta
xpay
ers)
§Im
pact
s on
tax
prac
titio
ner w
orkl
oads
§Im
pact
s on
the
tax
prac
titio
ner –
clie
nt re
latio
nshi
p
§Im
pact
s on
com
mun
ity c
onfid
ence
(for
bot
h ta
x pr
actit
ione
rs a
ndta
xpay
ers)
Fina
ncia
l / c
ash
flow
impa
cts
(for b
oth
tax
prac
titio
ners
and
taxp
ayer
s)
The
mos
t sig
nific
ant i
mpa
ct o
n th
e co
mm
unity
was
the
finan
cial
and
cas
h flo
w im
pact
s re
sulti
ng fr
om th
e pr
oces
sing
de
lays
. Thi
s is
sue
was
con
sist
ently
repo
rted
by b
oth
tax
prac
titio
ners
and
taxp
ayer
s th
roug
hout
the
perio
d Ja
nuar
y 20
10 –
Apr
il 20
10. T
axpa
yers
and
tax
prac
titio
ners
cite
d va
rious
exa
mpl
es o
f how
the
dela
ys w
ere
caus
ing
them
fin
anci
al s
tress
. For
exa
mpl
e, s
ome
clie
nts
advi
sed
they
wer
e un
able
to p
ay b
ills, w
hile
oth
ers
repo
rted
that
this
w
ould
forc
e th
em to
lay
off s
taff
in th
eir b
usin
esse
s. In
som
e in
stan
ces,
the
finan
cial
diff
icul
ties
appe
ared
to b
e co
mpo
unde
d by
rece
nt a
dver
se e
vent
s (in
clud
ing
natu
ral d
isas
ters
and
the
Glo
bal F
inan
cial
Cris
is).
In a
dditi
on,
peop
le re
porte
d th
at:
§C
entre
link
was
del
ayin
g or
cea
sing
Fam
ily T
ax B
enef
it (F
TB) p
aym
ents
bec
ause
they
wer
e un
able
toco
nfirm
lodg
men
t of 2
009
retu
rns,
and
§th
ey w
ere
unab
le to
pro
vide
pro
of o
f inc
ome
(NO
A) t
o th
ird p
artie
s (in
clud
ing
bank
s an
d C
entre
link)
.
Impa
cts
on ta
x pr
actit
ione
r wor
kloa
ds
Tax
prac
titio
ners
con
sist
ently
repo
rted
that
the
dela
ys w
ere
adve
rsel
y im
pact
ing
on th
eir w
orkl
oads
.S
peci
fical
ly, t
hey
refe
rred
to th
e in
crea
sed
volu
me
of c
alls
to a
nd fr
om b
oth
clie
nts
and
the
ATO
, to
keep
abr
east
of
wha
t was
hap
peni
ng. T
he im
pact
was
exa
cerb
ated
as
they
wou
ld o
ften
be re
quire
d to
dea
l with
ang
ry o
r fru
stra
ted
clie
nts.
Con
fusi
on o
ver t
he d
esig
n of
the
NO
As/
SO
As
also
gen
erat
ed c
lient
enq
uirie
s fo
r tax
pra
ctiti
oner
s. S
ome
prac
titio
ners
indi
cate
d th
at th
e ad
ditio
nal w
orkl
oads
gen
erat
ed b
y th
e de
ploy
men
t may
impa
ct o
n th
eir a
bilit
y to
mee
t up
com
ing
lodg
men
t com
mitm
ents
. Som
e pr
actit
ione
rs ra
ised
the
issu
e of
‘com
pens
atio
n’–
stat
ing
that
the
ATO
sh
ould
com
pens
ate
them
for t
he a
dver
se im
pact
s th
e de
ploy
men
t has
had
on
thei
r bus
ines
ses.
Impa
cts
on th
e ta
x pr
actit
ione
r-cl
ient
rela
tions
hip
Tax
prac
titio
ners
repo
rted
an in
crea
sed
stra
in o
n th
e pr
actit
ione
r-cl
ient
rela
tions
hip.
The
y ci
ted
seve
ral f
acto
rs w
hich
co
ntrib
uted
to th
is te
nsio
n:
§H
avin
g to
rela
y ch
angi
ng m
essa
ges
rega
rdin
g th
e pr
oces
sing
tim
efra
mes
and
del
ays.
§D
iscr
epan
cies
bet
wee
n th
e is
sue
date
and
del
iver
y da
te o
f NO
As
cont
ribut
ed to
per
cept
ions
that
the
prac
titio
ner w
as ‘h
oldi
ng o
n to
the
refu
nd’.
§Th
e la
ck o
f gen
eral
, dire
ct m
edia
by
the
ATO
(to
the
publ
ic) -
resu
lted
in c
lient
s bl
amin
g pr
actit
ione
rs fo
rth
e ex
tend
ed d
elay
s.
Lost
com
mun
ity c
onfid
ence
Com
plai
nts
rega
rdin
g th
e A
TO’s
shi
fting
adv
ice
on p
roce
ssin
g tim
es, p
oor c
usto
mer
ser
vice
(rep
orts
that
cal
ls w
ere
not r
etur
ned
prom
ptly
or e
xces
sive
wai
t tim
es o
n ca
ll ce
ntre
pho
ne li
nes)
and
the
desi
gn o
f the
NO
A/S
OA
has
re
sulte
d in
lost
com
mun
ity c
onfid
ence
. Tax
pra
ctiti
oner
s ha
ve e
xpre
ssed
incr
easi
ng s
cept
icis
m o
ver t
he A
TO’s
ad
vice
and
this
may
be
detri
men
tal t
o th
e lo
ng te
rm re
latio
nshi
p.3
Sou
rce:
TPA
LS R
elea
se 3
IT U
pdat
e (2
3/04
/10)
4 S
ourc
e: D
avid
But
ler’s
upd
ate
(20/
04/1
0) o
n at
o.go
v.au
5
Sou
rce:
Em
ail f
rom
[Nam
e de
lete
d] (2
7/04
/10)
168
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)8
SEC
TIO
N 2
–M
ON
THLY
SN
APS
HO
TS
SEC
TIO
N T
WO
MO
NTH
LY S
NA
PSH
OTS
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)9
SEC
TIO
N 2
-JA
NU
AR
Y/FE
BR
UA
RY
2010
SN
APS
HO
T
Ove
rvie
w§
The
mai
n co
ncer
n fo
r the
ext
erna
l com
mun
ity w
as th
e pr
oces
sing
del
ays
and
lack
of i
nfor
mat
ion
abou
t whe
n in
com
e ta
x re
turn
s w
ould
be
proc
esse
d an
d re
fund
s is
sued
.§
The
limite
d fu
nctio
nalit
y of
the
Tax
agen
t por
tal (
Por
tal)
was
als
o a
maj
or c
once
rn fo
r tax
pra
ctiti
oner
s.
§Th
e m
ajor
ity o
f cal
ls w
ere
neut
ral/
busi
ness
like
in to
ne, h
owev
er in
crea
sing
frus
tratio
ns b
egan
to s
urfa
ce m
id F
ebru
ary
(pos
t 15/
02/1
0).
§Th
e fin
anci
al h
ards
hip
and
flow
on
impa
cts
from
the
proc
essi
ng d
elay
s al
so b
egan
to e
mer
ge.
Tone
of e
xter
nal c
omm
unity
Ove
rall,
prim
arily
neu
tral.
Sig
ns o
f fru
stra
tion
emer
ged
mid
Feb
ruar
y (p
ost
15/0
2/10
), in
crea
sing
tow
ards
the
end
of
the
mon
th.
Tone
of t
ax p
ract
ition
ers
Ove
rall,
prim
arily
neu
tral.
Whi
le in
itial
ly
acce
ptin
g of
the
chan
ge/is
sues
, sig
ns o
f fru
stra
tion
emer
ged
mid
Feb
ruar
y, in
crea
sing
to
war
ds th
e en
d of
the
mon
th. S
ome
posi
tive
sent
imen
ts w
ere
evid
ent t
hrou
ghou
t the
mon
th.ha
ppy
angr
ypo
sitiv
ene
utra
lco
nfus
edfr
ustra
ted
unha
ppy
Key
topi
cs ra
ised
by
exte
rnal
com
mun
ity (i
nclu
ding
tax
prac
titio
ners
)
Larg
e C
orpo
rate
§P
OR
enq
uirie
s:(1
) The
clie
nt w
as u
nabl
e to
see
on
the
Por
tal w
heth
er th
e de
lay
was
due
to th
e sy
stem
sh
utdo
wn
or a
fata
l err
or w
hich
nee
ded
to b
e re
ctifi
ed.
(2) D
elay
in la
rge
activ
ity s
tate
men
t ref
und
–po
tent
ial I
nter
est o
n O
verp
aym
ent o
n $2
.9 m
illion
.(3
) 200
8 an
d 20
09 a
men
dmen
ts s
tock
pile
d fo
r pro
cess
ing.
Exp
ecte
dre
fund
$14
7.2
milli
on.
Com
mun
ity im
pact
s id
entif
ied
§W
hile
tax
prac
titio
ners
’aw
aren
ess
of th
e C
hang
e P
rogr
am d
eplo
ymen
t app
eare
d to
be
high
,fee
dbac
k in
dica
ted
that
som
eag
ents
did
not
fully
und
erst
and
the
deta
ils o
f the
cha
nge
or th
e im
pact
s it
wou
ld h
ave
on th
eir p
ract
ice
(spe
cific
ally
, the
leng
th o
f tim
e fo
r whi
ch A
TO s
yste
ms
and
Inco
me
Tax
Ret
urn
proc
essi
ng w
ould
be
affe
cted
).
§C
omm
ents
wer
e m
ade
by s
ome
tax
prac
titio
ners
abo
ut th
e la
ck o
f inf
orm
atio
n pr
ovid
ed b
y th
e A
TO to
the
gene
ral c
omm
unity
.
§In
itial
ly, a
gent
s ap
pear
ed h
appy
with
the
com
mun
icat
ions
pro
vide
d by
the
ATO
(eg
broa
dcas
t, eL
ink)
and
acc
eptin
g of
the
chan
ge/is
sues
. How
ever
, ong
oing
unc
erta
intie
s ar
ound
pro
cess
ing
timef
ram
es a
nd th
e sh
iftin
g ad
vice
from
the
ATO
rega
rdin
gw
hen
proc
essi
ng w
ould
retu
rn to
nor
mal
, cre
ated
incr
easi
ng fr
ustra
tions
.
§Ta
x pr
actit
ione
rs re
porte
d va
rious
por
tal p
robl
ems
thro
ugho
ut th
e m
onth
, inc
ludi
ng a
cces
s di
fficu
lties
and
inab
ility
to p
erfo
rmsp
ecifi
c ta
sks
(eg
upda
ting
clie
nt d
etai
ls, a
cces
sing
repo
rts,v
iew
ing
acco
unts
).
§Th
e vo
lum
e of
PO
R e
nqui
ries
incr
ease
d po
st 1
5 Fe
brua
ry (i
e th
e da
te th
e A
TO a
dvis
ed p
roce
ssin
g w
ould
retu
rn to
nor
mal
).
§P
eopl
e be
gan
to e
xper
ienc
e a
rang
e of
fina
ncia
l and
flow
on
impa
cts
from
the
proc
essi
ng d
elay
s. T
hese
impa
cts
incl
uded
:-f
inan
cial
har
dshi
p / c
ash
flow
pro
blem
s ex
perie
nced
by
both
tax
prac
titio
ners
and
the
gene
ral c
omm
unity
-C
entre
link
dela
ying
or c
easi
ng F
TB p
aym
ents
(bec
ause
ther
e w
ere
unab
le to
con
firm
lodg
men
t of 2
009
retu
rns)
, and
-t
axpa
yers
una
ble
to p
rovi
de p
roof
of i
ncom
e (N
OA
) to
third
par
ties,
incl
udin
g ba
nks
and
Cen
trelin
k.
§In
som
e ca
ses,
fina
ncia
l diff
icul
ties
appe
ared
to b
e co
mpo
unde
dby
rece
nt a
dver
se e
vent
s, in
clud
ing
natu
ral d
isas
ters
and
the
Glo
bal F
inan
cial
Cris
is.
§Ta
x pr
actit
ione
rs p
rovi
ded
mix
ed fe
edba
ck o
n th
e N
OA
s/S
OA
. Spe
cific
con
cern
s in
clud
ed th
e le
ngth
of t
he s
tate
men
t,co
nfus
ing
cont
ent,
prin
t bei
ng to
o sm
all a
nd th
e re
fere
nce
num
ber b
eing
inco
mpa
tible
with
pra
ctiti
oner
s’so
ftwar
e.
happ
yan
gry
posi
tive
neut
ral
conf
used
frus
trate
dun
happ
y
ATO
act
ion
§B
riefin
g no
te fo
rwar
ded
to th
e A
TO/T
ax P
ract
ition
er F
orum
(ATP
F) m
embe
rs. U
pdat
e pr
ovid
ed to
ATP
F m
embe
rs o
n26
/02/
10
§C
hang
e P
rogr
am C
onsu
ltativ
e G
roup
mee
tings
con
duct
ed (0
5/02
/10,
09/0
2/10
, 11/
02/1
0, 1
6/02
/10,
23/
02/1
0, 2
5/02
/10)
§C
omm
unic
atio
n pr
oduc
ts is
sued
(eg
broa
dcas
t, eL
ink,
Por
tal m
essa
ges)
§O
ngoi
ng d
iscu
ssio
ns w
ith C
entre
link
/ CS
A
§In
form
atio
n re
porte
d to
key
sta
keho
lder
s / d
ecis
ion
mak
ers
(incl
udin
g th
e A
TO’s
ner
ve c
entre
).
Am
ber
24 F
ebG
reen
28 J
anN
eari
ng a
mbe
r18
Feb
16%
55%
ABN/
TFN
appli
catio
ns
18%
45%
91%
100%
Freq
uenc
y ra
ised
over
22
repo
rts
Othe
r (eg
ELS
func
tiona
lity, p
ayme
nt ar
rang
emen
ts)
5 %
Notic
e of A
sses
smen
t (NO
A)/S
tatem
ent o
f Acc
ount
(SOA
)
13 %
Acco
unts
29 %
Porta
l
29 %
Prog
ress
of r
eturn
(POR
)
% o
f tot
al iss
ues
raise
d ov
er th
e m
onth
(77)
Topi
c
Com
plai
nts
Ref
er to
Sec
tion
3 fo
r a m
onth
ly b
reak
dow
n of
ATO
com
plai
nts
rece
ived
.
Rat
ing
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)10
SEC
TIO
N 2
-M
AR
CH
201
0 SN
APS
HO
T
Ove
rvie
w§
Pro
cess
ing
dela
ys a
nd th
e flo
w o
n fin
anci
al im
pact
s / d
iffic
ultie
s co
ntin
ued
to b
e th
e m
ain
conc
ern
for t
he e
xter
nal c
omm
unity
.§
The
maj
ority
of c
alls
rem
aine
d ne
utra
l/ bu
sine
ss li
ke in
tone
, how
ever
ther
e w
as e
vide
nce
of in
crea
sing
unh
appi
ness
and
frus
tratio
n.
§Ta
x pr
actit
ione
rs b
egan
repo
rting
adv
erse
impa
cts
on th
e pr
actit
ione
r/clie
nt re
latio
nshi
p.§
Neg
ativ
e fe
edba
ck o
n th
e N
OA
/SO
A c
ontin
ued.
Tone
of e
xter
nal c
omm
unity
Ove
rall
prim
arily
neu
tral.
Und
erto
nes
of
frust
ratio
n w
ere
evid
ent a
t the
sta
rt of
the
mon
th. T
his
shift
ed to
frus
tratio
n an
d an
ger t
owar
ds e
nd o
f the
mon
th.
Tone
of t
ax p
ract
ition
ers
Ove
rall
prim
arily
neu
tral.
Mix
ed s
entim
ents
(p
ositi
ve a
nd fr
ustra
tion)
wer
e ev
iden
t at t
he
star
t of t
he m
onth
. Thi
s sh
ifted
to fr
ustra
tion
and
ange
r tow
ards
the
end
of th
e m
onth
.
happ
yan
gry
posi
tive
neut
ral
conf
used
frus
trate
dun
happ
y
Key
topi
cs ra
ised
by
exte
rnal
com
mun
ity (i
nclu
ding
tax
prac
titio
ners
)
Larg
e C
orpo
rate
§E
xten
ded
dela
y in
refu
nd c
hequ
e.§
Del
ays
in g
ettin
g a
repl
acem
ent c
hequ
e to
a c
orpo
rate
. Iss
ue e
scal
ated
. Pot
entia
l for
Inte
rest
on
Ove
rpay
men
t (IO
P) o
n re
fund
.
Com
mun
ity im
pact
s id
entif
ied
§P
OR
requ
ests
con
tinue
d to
be
the
mai
n tri
gger
of e
nqui
ries
from
the
com
mun
ity. S
ome
of th
ese
calls
wer
e re
ceiv
ed fr
omta
xpay
ers
requ
iring
pro
of o
f inc
ome
to p
rovi
de to
third
par
ties
(eg
bank
s an
d C
entre
link)
. Cal
ls w
ere
also
pro
mpt
ed b
y th
ein
cons
iste
ncie
s / c
onfu
sion
rega
rdin
g th
e pr
iorit
y fo
r pro
cess
ing
retu
rns
(eg
retu
rns
lodg
ed in
Feb
ruar
y ha
d be
enpr
oces
sed,
whi
le th
ose
from
Dec
embe
r rem
aine
d un
actio
ned)
.
§Ta
x pr
actit
ione
rs a
nd ta
xpay
ers
cont
inue
d re
porti
ng c
ash
flow
pro
blem
s re
sulti
ng fr
om th
e pr
oces
sing
del
ays.
§Ta
x pr
actit
ione
rs b
egan
repo
rting
adv
erse
impa
cts
on th
eir p
ract
ice
and
the
prac
titio
ner-
clie
nt re
latio
nshi
p. F
or e
xam
ple:
-Tax
pra
ctiti
oner
s ex
perie
nced
incr
ease
d ca
ll vo
lum
es, a
s cl
ient
s (s
ome
angr
y) c
onta
cted
them
abo
ut th
eir r
efun
ds.
-Hav
ing
to p
ass
on m
essa
ges
abou
t pro
cess
ing
dela
ys is
neg
ativ
ely
impa
ctin
g on
the
rela
tions
hip
(esp
ecia
lly w
hen
mes
sage
ske
ep c
hang
ing
–du
e to
the
ATO
’s s
hifti
ng a
dvic
e).
-Ins
tanc
es o
f clie
nts
accu
sing
pra
ctiti
oner
s of
pro
vidi
ng fa
lse
assu
ranc
es th
at re
turn
s ha
ve b
een
lodg
ed (b
ecau
se w
hen
the
clie
nt c
onta
cts
the
ATO
dire
ctly
, the
y w
ere
bein
g ad
vise
d th
ere
was
no
reco
rd o
f lod
gmen
t)-
Dis
crep
anci
es b
etw
een
the
issu
e da
te a
nd d
eliv
ery
date
of N
OA
sis
cre
atin
g a
perc
eptio
n th
at th
e pr
actit
ione
r is
‘hol
ding
on
to re
fund
s’.
§S
ome
criti
cism
abo
ut th
e A
TO’S
com
mun
icat
ion:
-Lac
k of
mes
sage
s pr
ovid
ed d
irect
ly to
the
gene
ral p
ublic
(eg
via
gene
ral m
edia
).-L
ack
of re
fere
nce
to C
entre
link
issu
es in
the
ATO
’s c
omm
unic
atio
n.
§Ta
x pr
actit
ione
rs b
egan
exp
ress
ing
incr
easi
ng s
cept
icis
m a
bout
the
advi
ce p
rovi
ded
by th
e A
TO.
§W
hile
tax
prac
titio
ners
con
tinue
d to
pro
vide
prim
arily
neg
ativ
efe
edba
ck o
n N
OA
s/S
OA
s (e
g to
o m
any
page
s to
pho
toco
py to
put o
n th
e cl
ient
file
(inc
reas
es c
osts
), TF
N o
r clie
nt ID
onl
y ap
pear
s on
firs
t pag
e an
d no
t on
subs
eque
nt p
ages
), so
me
posi
tive
com
men
ts w
ere
also
rece
ived
.
§N
OA
–E
rror
iden
tifie
dTa
xabl
e in
com
e di
spla
yed
on a
ll In
com
e Ta
x N
OA
s ge
nera
ted
from
Frid
ay 5
thM
arch
was
inco
rrect
.
happ
yan
gry
posi
tive
neut
ral
conf
used
frus
trate
dun
happ
y
ATO
act
ion
§C
hang
e P
rogr
am C
onsu
ltativ
e G
roup
mee
tings
(02/
03/1
0, 1
2/03
/10,
19/0
3/10
).
§E
mai
l (in
clud
ing
link
to D
avid
But
ler’s
upd
ate)
sen
t to
all p
rofe
ssio
nal a
ssoc
iatio
ns a
nd fo
rum
sec
reta
riats
for d
istri
butio
n to
mem
bers
(03/
03/1
0).
§D
avid
But
ler’s
upd
ate
publ
ishe
d on
ato
.gov
.au
(15/
03/1
0).
§B
road
cast
issu
ed (2
2/03
/10)
.
§W
orks
hop
held
with
ATO
repr
esen
tativ
es, t
ax p
ract
ition
er re
pres
enta
tives
and
sof
twar
e de
velo
pers
to d
iscu
ss is
sues
and
poss
ible
rede
sign
opt
ions
for N
OA
/SO
As
(230
/3/1
0).
§N
OA
err
or -
Sto
pped
cor
resp
onde
nce
bein
g po
sted
to c
lient
s af
fect
ed b
y 05
/03/
10 in
corr
ect t
axab
le in
com
e er
ror.
Am
ber
3 M
arN
eari
ng a
mbe
r1
Mar
27 %
86%
Notic
e of A
sses
smen
t (NO
A)/S
tatem
ent o
f Acc
ount
(SOA
)
21%
29%
86%
100%
Freq
uenc
y ra
ised
over
14
repo
rts
6%Ac
coun
ts
9 %
ELS
func
tiona
lity
27 %
Porta
l
31 %
Prog
ress
of r
eturn
(POR
)
% o
f tot
al iss
ues
raise
d ov
er th
e m
onth
(45)
Topi
c
Com
plai
nts
Ref
er to
Sec
tion
3 fo
r a m
onth
ly b
reak
dow
n of
ATO
com
plai
nts
rece
ived
.
Cha
nge
Pro
gram
com
plai
nts
cont
inue
d in
an
upw
ard
trend
thro
ugho
ut M
arch
, with
the
gene
ral m
ood
/ ton
e of
com
plai
nts
tend
ing
to b
e ‘a
nger
’and
‘low
er to
lera
nce’
.
Rat
ing
Red
29 M
ar
171
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)11
SEC
TIO
N 2
–A
PRIL
201
0 SN
APS
HO
T
Ove
rvie
w§
The
cont
inue
d de
lays
with
the
proc
essi
ng o
f ret
urns
/issu
ing
refu
nds,
and
sub
sequ
ent f
low
on
effe
cts
rem
ain
the
mai
n co
ncer
n of
the
exte
rnal
com
mun
ity.
§P
ract
ition
ers
cont
inue
to e
xpre
ss fr
ustra
tion
with
the
ATO
. §
Cha
nge
Pro
gram
rela
ted
com
plai
nts
cont
inue
to b
e hi
gh (t
rend
ing
upw
ard)
, with
repe
at c
alls
for e
xist
ing
com
plai
nts
also
hig
h.§
Neg
ativ
e fe
edba
ck o
n N
OA
/SO
A is
con
tinui
ng a
nd in
crea
sing
.
Tone
of e
xter
nal c
omm
unity
Ther
e ha
s be
en a
cle
ar s
hift
in
com
mun
ity a
ttitu
des,
with
an
incr
easi
ng
num
ber o
f cal
lers
exp
ress
ing
unha
ppin
ess,
frus
tratio
n an
d an
ger.
This
is
par
ticul
arly
evi
dent
in c
alls
mad
e to
the
com
plai
nts
line.
Tone
of t
ax p
ract
ition
ers
Tax
prac
titio
ners
are
exp
ress
ing
incr
easi
ng
leve
ls o
f fru
stra
tion
and
ange
r. T
he to
lera
nce
and
posi
tive
sent
imen
ts s
how
n in
ear
lier
mon
ths
has
dim
inis
hed.
ATO
act
ion
§N
OA
/SO
A e
rror
s. C
omm
unic
atio
n (b
road
cast
s) w
ith ta
x pr
actit
ione
rs to
adv
ise
of th
e er
rors
and
rem
edie
s.
(1) E
rror
is b
eing
fixe
d
(2) O
utbo
und
cam
paig
n co
mm
ence
d on
06/
04/1
0. C
hequ
es to
issu
e 12
/04/
10.
Com
mun
icat
ion
–D
avid
But
ler b
riefe
d C
EO
s of
the
prof
essi
onal
ass
ocia
tions
(19/
04/1
0 an
d 23
/04/
10)
§C
EO
brie
fing
(19/
04/1
0)
§P
rofe
ssio
nal a
ssoc
iatio
n re
pres
enta
tives
–br
iefin
g (2
3/04
/10)
§M
essa
ge fr
om th
e C
omm
issi
oner
issu
ed o
n 29
Apr
il (a
to.g
ov.a
u) –
apol
ogis
ing
for t
he d
elay
s an
d th
anki
ng ta
x ag
ents
for t
heir
patie
nce
and
supp
ort.
Com
mun
ity im
pact
s id
entif
ied
happ
yan
gry
posi
tive
neut
ral
conf
used
frus
trate
dun
happ
y
Key
topi
cs ra
ised
by
exte
rnal
com
mun
ity (i
nclu
ding
tax
prac
titio
ners
)
Larg
e C
orpo
rate
§S
ix 2
009
ITR
refu
nds
(tota
lling
appr
ox $
80m
il) a
re a
ccru
ing
IOP
.
§Li
fe c
ompa
ny h
as n
ot re
ceiv
ed a
$15
mil
refu
nd fr
om e
arly
lodg
men
t of 2
009
retu
rn. T
hese
fund
s ar
e ne
eded
to p
ay $
8mil
Mar
ch q
uarte
r AS
(due
21/
04/1
0)
§D
elay
in is
suin
g A
ctiv
ity S
tate
men
ts fo
r Jan
-Mar
qua
rter.
Fix
faile
d an
d no
w e
xpec
ts A
ctiv
ity S
tate
men
ts
will
be g
ener
ated
16/
04/1
0. Im
pact
–de
laye
d lo
dgm
ent a
nd p
aym
ent o
f BA
S li
abilit
ies.
§C
ontin
ued
dela
ys w
ith th
e pr
oces
sing
of r
etur
ns/is
suin
g re
fund
s, a
nd s
ubse
quen
t flo
w o
n ef
fect
s, re
mai
n th
e m
ain
conc
erns
.Ta
xpay
ers
and
tax
prac
titio
ners
con
tinue
to c
hase
retu
rns
lodg
ed in
Dec
embe
r 200
9 an
d Ja
nuar
y 20
10. T
here
is c
onfu
sion
and
frust
ratio
n ov
er th
e ap
pare
nt in
disc
rimin
ate
way
in w
hich
retu
rns
are
bein
g pr
oces
sed
(with
the
perc
eptio
n th
at re
turn
slo
dged
in D
ecem
ber h
ave
been
ove
rlook
ed).
§Ta
x pr
actit
ione
rs e
xpre
ssed
frus
tratio
n at
the
ATO
’s c
omm
unic
atio
n, s
tatin
g th
at:
-the
ATO
had
don
e lit
tle to
cre
ate
gene
ral p
ublic
aw
aren
ess
(eg
via
new
spap
er o
r TV
) abo
ut is
sues
bei
ng e
xper
ienc
ed. A
s a
cons
eque
nce,
taxp
ayer
s ar
e co
ntin
uing
to b
lam
e th
e pr
actit
ione
rs fo
r the
ext
ende
d de
lays
. -t
hey
are
unha
ppy
with
the
lack
of t
imel
y co
mm
unic
atio
n fro
m th
eA
TO re
gard
ing
the
issu
es b
eing
exp
erie
nced
and
the
prog
ress
on
rect
ifyin
g th
e pr
oble
ms.
§Ta
x pr
actit
ione
rs c
ontin
ue to
com
men
t abo
ut im
pact
s on
thei
r wor
kloa
ds. S
peci
fical
ly, t
he h
igh
volu
me
of c
alls
to/fr
om c
lient
sto
kee
p th
em u
pdat
ed. S
ome
prac
titio
ners
hav
e ex
pres
sed
conc
ern
that
the
addi
tiona
l wor
kloa
ds b
eing
cre
ated
will
impa
ct o
nth
eir a
bilit
y to
mee
t fut
ure
lodg
men
t com
mitm
ents
. One
pra
ctiti
oner
rece
ived
two
batc
hes
of S
OA
s/N
OA
s w
ith a
ll en
velo
pes
unse
aled
.
§S
ome
tax
prac
titio
ners
exp
ress
ed a
vie
w th
at th
e A
TO s
houl
d co
mpe
nsat
e th
em fo
r the
ong
oing
pro
blem
s af
fect
ing
thei
rbu
sine
ss.
§Ta
x pr
actit
ione
rs h
ave
prov
ided
exa
mpl
es o
f how
the
ATO
’s in
tern
al p
roce
sses
are
not
reco
gnis
ing
the
impa
cts
of th
e de
lays
.Fo
r exa
mpl
e:-O
ne p
ract
ition
er re
porte
d th
at 2
0 cl
ient
s re
ceiv
ed lo
dgm
ent w
arni
ng le
tters
on
31 M
arch
alth
ough
man
y ha
d al
read
y lo
dged
. -D
ebt
colle
ctio
n no
tice
issu
ed, b
ut th
e A
TO d
id n
ot fa
ctor
in a
n am
endm
ent (
not b
een
proc
esse
d du
e to
‘sys
tem
issu
es’)
whi
chw
ould
resu
lt in
a re
fund
.
§N
OA
/SO
A –
Err
ors
iden
tifie
d(1
) App
roxi
mat
ely
140,
000
NO
As
wer
e is
sued
with
out a
che
que
(2) C
lient
s re
ceiv
ed N
OA
s ad
visi
ng th
eir r
efun
ds h
ad b
een
EFT
’d, b
ut th
e ta
xpay
er d
id n
ot n
omin
ate
a ba
nk a
ccou
nt.
happ
yan
gry
posi
tive
neut
ral
conf
used
frus
trate
dun
happ
y
Red
Com
plai
nts
Ref
er to
Sec
tion
3 fo
r a m
onth
ly b
reak
dow
n of
ATO
com
plai
nts
rece
ived
.
Ther
e ha
s be
en a
sig
nific
ant u
pwar
d tre
nd in
the
volu
me
of c
ompl
aint
s re
ceiv
ed d
urin
g A
pril.
Th
ere
has
also
bee
n a
num
ber o
f com
plai
nts
abou
t poo
r cus
tom
er s
ervi
ce (i
n th
e fo
rm o
fco
nflic
ting
advi
ce, l
ong
wai
t tim
es o
n ph
one
queu
es a
nd d
elay
s in
rece
ivin
g ca
ll ba
cks)
.
Rat
ing
Pro
gres
s of
retu
rns
and
the
flow
on
impa
cts
(eg
cash
flow
s, ta
x pr
actit
ione
r wor
kloa
ds) r
emai
n th
e m
ain
conc
erns
for t
he e
xter
nal c
omm
unity
. Peo
ple
are
expr
essi
ng fr
ustra
tion
and
ange
r abo
ut th
e on
goin
g de
lays
and
the
ATO
’s s
hifti
ng a
dvic
e on
whe
n re
fund
s w
ill be
rece
ived
,
As
the
volu
me
of re
turn
s pr
oces
sed
incr
ease
s, th
ere
has
been
an
incr
ease
in th
e nu
mbe
r of e
nqui
ries
rela
ting
to th
e N
OA
/SO
A. C
ompl
aint
s ab
out t
he d
esig
n of
the
corr
espo
nden
ce c
ontin
ue, a
s w
ell a
s co
nfus
ion
abou
t the
con
tent
and
the
orde
r in
whi
ch N
OA
s, S
OA
s an
d ch
eque
s ar
e re
ceiv
ed.
172
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)12
SEC
TIO
N 3
–C
OM
PLA
INTS
SEC
TIO
N T
HR
EEC
OM
PLA
INTS
173
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IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)13
SEC
TIO
N 3
-C
OM
PLA
INTS
ATO
com
plai
nts
rece
ived
and
fina
lised
–m
onth
ly b
reak
dow
n
1340
Tota
l
19O
mbu
dsm
an In
v.
20A
TO R
evie
w
452
TPS
Man
aged
849
BS
L M
anag
ed
Feb
10Pr
oduc
t
Com
plai
nts
rece
ived
–Fe
brua
ry 2
010
1133
Tota
l
7O
mbu
dsm
an In
v.
21A
TO R
evie
w
386
TPS
Man
aged
725
BS
L M
anag
ed
Feb
10Pr
oduc
t
Com
plai
nts
final
ised
–Fe
brua
ry 2
010
3994
Tota
l
20O
mbu
dsm
an In
v.
27A
TO R
evie
w
2165
TPS
Man
aged
1782
BS
L M
anag
ed
Mar
10
Prod
uct
Com
plai
nts
rece
ived
–M
arch
201
0
1574
Tota
l
20O
mbu
dsm
an In
v.
20A
TO R
evie
w
476
TPS
Man
aged
1058
BS
L M
anag
ed
Mar
10
Prod
uct
Com
plai
nts
final
ised
–M
arch
201
0
Comp
laint
s Rec
eive
d - D
aily R
esul
ts J
an &
Feb
050100
150
200
250
300
350
400
450
500 1-
Feb
5-Fe
b9-
Feb
13-F
eb17
-Feb
21-F
eb25
-Feb
29 Fe
b
2010
2009
2008
Com
plai
nts
Rece
ived
- Da
ily R
esul
ts M
arch
050100
150
200
250
300
350
400
1 Ma
r5
Mar
9 Ma
r13
Mar
17 M
ar21
Mar
25 M
ar29
Mar
2010
2009
2008
174
Review into the Australian Taxation Office's Change Program
IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)14
SEC
TIO
N 3
-C
OM
PLA
INTS
ATO
com
plai
nts
rece
ived
and
fina
lised
–m
onth
ly b
reak
dow
nM
ay 2
010
For t
he p
erio
d 1-
17 M
ay, 5
,315
com
plai
nts
wer
e re
ceiv
ed a
nd 5
,442
com
plai
nts
wer
efin
alis
ed.
8731
Tota
l
29O
mbu
dsm
an In
v.
24A
TO R
evie
w
6736
TPS
Man
aged
1942
BS
L M
anag
ed
Apr 1
0Pr
oduc
t
Com
plai
nts
rece
ived
–Ap
ril 2
010
5505
Tota
l
12O
mbu
dsm
an In
v.
26A
TO R
evie
w
3586
TPS
Man
aged
1881
BS
L M
anag
ed
Apr 1
0Pr
oduc
t
Com
plai
nts
final
ised
–Ap
ril 2
010
Not
e: C
ompl
aint
s da
ta is
indi
cativ
e on
ly.
Comp
laint
s Rec
eive
d - D
aily R
esul
ts A
pril
0
100
200
300
400
500
600
1 Apr
5 Apr
9 Apr
13 A
pr17
Apr20
1020
0920
08
175
Review into the Australian Taxation Office's Change Program
IN-C
ON
FID
EN
CE
C
omm
unity
exp
erie
nce
–C
hang
e P
rogr
am d
eplo
ymen
t (R
elea
se 3
)15
SEC
TIO
N 3
–C
OM
PLA
INTS
APP
END
IX A
EXA
MPL
E –
ERIK
CO
RPO
RA
TE
DA
SHB
OA
RD
REP
OR
T
176
Review into the Australian Taxation Office's Change Program
Ext
erna
l Rea
dine
ss In
telli
genc
e an
d K
now
ledg
e (E
RIK
) Das
hboa
rd –
Cor
pora
te R
epor
t
Ove
rvie
w•D
elay
with
the
proc
essi
ng o
f ret
urns
/issu
ing
refu
nds,
and
subs
eque
nt fl
ow o
n ef
fect
s, re
mai
ns th
e m
ain
conc
ern
of th
e ex
tern
al c
omm
unity
•Pra
ctiti
oner
s con
tinue
to ra
ise
conc
erns
abo
ut th
e ne
w N
OA
s bei
ng to
o lo
ng, c
onfu
sing
and
not
nec
essa
rily
arriv
ing
with
the
SOA
or c
hequ
e at
tach
ed
Publ
ished
: Mon
day
10 M
ay 2
010
(Sta
tus:
5 M
ay -
COB,
7 M
ay)
IN-C
ON
FID
EN
CE
Red
Ton
e of
ext
erna
l com
mun
ity
The
maj
ority
of g
ener
al c
alls
sam
pled
by
CS&
S w
ere
neut
ral/b
usin
ess l
ike
in to
ne. F
rom
the
CS&
S co
mpl
aint
s ca
lls sa
mpl
ed it
app
ears
the
mai
n to
ne o
f ind
ivid
uals
co
ntin
ues t
o be
unh
appi
ness
, fru
stra
tion
and
ange
r.
Ton
e of
tax
prac
titio
ners
Th
ere
wer
e 14
Rel
atio
nshi
p M
ange
r con
tact
s with
pr
actit
ione
rs w
hich
rela
ted
to th
e C
hang
e Pr
ogra
m a
nd
conf
usio
n, fr
ustra
tion
or a
nger
was
exp
ress
ed in
11
(79%
) of
thes
e co
ntac
ts.
Cal
l Vol
umes
(2)
Prog
ress
of r
etur
n/is
suin
g of
refu
nds r
emai
ns th
e m
ain
conc
ern
for t
he e
xter
nal c
omm
unity
and
con
tinue
s to
be th
e m
ain
call
driv
er re
flect
ed C
S&S
gene
ral c
all q
ueue
dat
a.
App
rove
d by
: [N
ame
dele
ted]
Prep
ared
by:
[n
ame
dele
ted]
Dis
clai
mer
This
repo
rt hi
ghlig
hts i
ncid
ents
and
raw
inte
llige
nce
whi
ch is
as y
et to
be
verif
ied
and
shou
ld n
ot n
eces
saril
y be
seen
as r
epre
sent
ativ
e at
this
stag
e.
Info
rmat
ion
prov
ided
by
TPA
LS, C
S&S,
ATO
Com
plai
nts,
Med
ia U
nit a
nd M
EI.
Com
mun
ity im
pact
s bei
ng id
entif
ied
Tax
prac
titio
ners
and
taxp
ayer
s con
tinue
to c
hase
up
retu
rns l
odge
d in
Dec
embe
r 09
and
Janu
ary
10.
Tax
prac
titio
ners
con
tinue
to c
omm
ent t
hat i
t app
ears
that
the
ATO
is p
roce
ssin
g re
turn
s on
a la
st in
firs
t out
(L
IFO
) ins
tead
of f
irst i
n fir
st o
ut (F
IFO
) bas
is a
nd th
at p
roce
ssin
g of
deb
it as
sess
men
ts o
ccur
s qui
ckly
, whi
lst
refu
nds t
end
to ta
ke lo
nger
.
Follo
win
g th
e m
eetin
g on
Frid
ay 2
3rd
Apr
il w
ith T
ax P
rofe
ssio
nal A
ssoc
iatio
n re
pres
enta
tives
, the
Ass
ocia
tions
co
ntin
ue to
forw
ard
issu
es th
roug
h to
the
ERIK
team
for a
ssis
tanc
e w
ith re
solu
tion.
Issu
es id
entif
ied
incl
ude:
•clie
nts w
ho h
ave
rece
ived
a re
fund
, but
the
ATO
has
faile
d to
pay
the
clie
nts t
he in
tere
st fo
r the
del
ay in
pr
oces
sing
thei
r tax
ass
essm
ent.
The
com
mun
ity c
ontin
ues t
o ex
perie
nce
and
com
plai
n ab
out t
he in
abili
ty to
get
thro
ugh
or lo
ng d
elay
s in
getti
ng th
roug
h on
ATO
pho
ne li
nes.
Ther
e w
as a
lso
an in
stan
ce in
com
plai
nt sa
mpl
es w
here
a re
solv
er h
as n
ot
cont
acte
d th
e cl
ient
with
in sp
ecifi
ed ti
mef
ram
es.
The
mai
n is
sues
rais
ed b
y ta
x pr
actit
ione
rs in
con
tact
s with
Rel
atio
nshi
p M
ange
rs c
ontin
ue to
be
arou
nd th
e ne
w
notic
es o
f ass
essm
ent (
NO
As)
:•T
he m
ain
conc
erns
rais
ed re
mai
n th
e sa
me
-abo
ut tw
o th
irds o
f pra
ctiti
oner
s sai
d th
e ne
w n
otic
es a
re
too
long
(ie
have
too
man
y pa
ges)
and
abo
ut tw
o fif
ths s
aid
they
are
con
fusi
ng fo
r clie
nts.
•Pra
ctiti
oner
s con
tinue
to sa
y th
ey a
re sp
endi
ng a
dditi
onal
tim
eha
ving
to e
xpla
in th
e co
nfus
ing
new
no
tices
to c
lient
s. O
ne a
gent
com
men
ted
that
the
com
plex
ity o
fthe
new
NO
As m
eans
they
hav
e to
be
revi
ewed
by
acco
untin
g st
aff r
athe
r tha
n ad
min
istra
tive
staf
f,fu
rther
incr
easi
ng c
osts
.
As r
epor
ted
over
rece
nt w
eeks
, tax
pra
ctiti
oner
s con
tinue
to c
omm
ent o
n th
e tim
e se
para
tion
betw
een
rece
ivin
g di
ffer
ent n
otic
es (N
OA
s and
SO
As)
, or t
he c
hequ
e. P
ract
ition
ers w
ould
rath
er th
e co
rres
pond
ence
all
arriv
ed
toge
ther
.
One
pra
ctiti
oner
said
they
hav
e ha
d to
dea
l with
clie
nts w
ho a
refr
ustra
ted
and
angr
y. A
noth
er p
ract
ition
er sa
id
thei
r clie
nt h
ad ru
ng th
e A
TO a
nd m
anag
ed to
get
the
refu
nd p
roce
ssed
–th
e cl
ient
now
thin
ks th
e ag
ent i
s in
effe
ctiv
e as
the
agen
t had
bee
n try
ing
to a
chie
ve th
e sa
me
resu
lt fo
r wee
ks w
ithou
t suc
cess
.
happ
yan
gry
posi
tive
neut
ral
conf
used
frus
trate
dun
happ
y
happ
yan
gry
posi
tive
neut
ral
conf
used
frus
trate
dun
happ
y
Med
ia•
Adel
aide
Adv
ertis
er (L
aure
n N
ovak
) con
tact
ed th
e A
TO to
ask
how
man
y re
turn
s wer
e ov
er 3
0 da
ys o
ld, h
ow in
tere
st
was
pai
d an
d an
est
imat
e of
tota
l int
eres
t pay
able
. We
wer
e ab
leto
adv
ise
that
app
roxi
mat
ely
9,50
0 re
fund
wer
e m
ore
than
50
days
old
, how
ever
we
wer
e no
t in
a po
sitio
n to
pro
vide
an
estim
ate
of to
tal i
nter
est a
t thi
s sta
ge. S
he a
lso
wan
ted
to k
now
if in
tere
st w
as a
sses
sabl
e in
com
e fo
r tax
pur
pose
s. W
e co
nfirm
ed th
at, l
ike
any
othe
r int
eres
t pay
men
ts, i
t was
. Ex
pect
the
stor
y to
run
tom
orro
w.
•6t
hM
ay, 2
010.
Arti
cle
abou
t the
IGO
T re
view
in th
e A
ustra
lian
Fina
ncia
l Rev
iew
. In
the
artic
le, C
PA's
Paul
Dru
m
com
men
ted
that
the
Com
mis
sion
er's
rece
nt st
atem
ent w
as 't
he fi
rst p
ublic
ack
now
ledg
men
t tha
t the
re h
ave
been
m
ista
kes m
ade'.
In re
latio
n to
the
IGO
T re
view
, the
Inst
itute
ofC
harte
d A
ccou
ntan
t's Y
assa
r El-A
nsar
y sa
id C
hang
e Pr
ogra
m is
sues
'hav
e ca
used
con
side
rabl
e pa
in to
man
y ta
xpay
ers a
nd th
eir a
gent
s'.•
Mem
ber c
omm
ents
pos
ted
in T
ax In
stitu
te o
f Aus
tralia
Tax
vine
new
slet
ter e
xpre
ssed
dis
satis
fact
ion
at th
e m
inim
al
exte
nsio
n to
lodg
men
ts, w
ith o
ne m
embe
r cal
ling
for a
bla
nket
ext
ensi
on u
ntil
30 Ju
ne. A
num
ber o
f oth
er m
embe
r co
mm
ents
rela
ted
to p
revi
ousl
y re
porte
d is
sues
and
the
Com
mis
sion
er’s
mes
sage
to ta
x ag
ents
and
thei
r clie
nts.
Lar
ge C
orpo
rate
, Sm
all /
Med
ium
Bus
ines
s and
Mic
ro E
nter
pris
es a
nd In
divi
dual
s •
No
issu
es re
porte
d
Not
ava
il
Not
ava
il
729
4,71
4
22,6
68
7 M
ay
397
276
885
5,17
3
25,5
69
6 M
ay
386
281
883
5,38
7
24,8
07
5 M
ay
Tax
Prac
titio
ner
Gen
eral
MEI
Tax
Prac
titio
ner
TPA
LS
CS&
S
Tax
Prac
titio
ner
Gen
eral
Cal
l Typ
e
Com
plai
nts
Ove
rall,
com
plai
nt le
vels
rem
ain
high
. -1
90 c
ompl
aint
s wer
e re
ceiv
ed b
y C
S&S
over
two
day
perio
d (n
o da
ta a
vaila
ble
for W
edne
sday
). 4
3 (2
3%) w
ere
chan
ge
prog
ram
and
25
(58%
) of t
hese
rela
ted
to p
rogr
ess o
f ret
urns
. C
S&S
repo
rt th
at fr
ustra
tion
and
ange
r con
tinue
to b
e th
e m
ain
moo
d fo
r com
plai
nts.
-731
com
plai
nts w
ere
rece
ived
by
TPA
LS (1
)fo
r the
thre
e da
y pe
riod.
App
roxi
mat
ely
80%
of c
ompl
aint
cas
es re
ceiv
ed
rela
ted
to th
e pr
ogre
ss o
f clie
nts’
inco
me
tax
retu
rns.
The
maj
ority
of t
he b
alan
ce o
f com
plai
nts r
elat
ed to
issu
es a
bout
th
e pr
ogre
ss o
f am
endm
ents
. Of t
he 8
0 pr
ogre
ss o
f ret
urn
com
plai
nts s
ampl
ed, 4
% re
late
d to
Nov
embe
r lod
gmen
ts, 7
%
Dec
embe
r, 9%
Janu
ary,
29%
Feb
ruar
y, 4
4% M
arch
and
7%
A
pril.
Foot
note
s (1)
Eac
h TP
ALS
com
plai
nt m
ay re
late
to m
ultip
le c
lient
s(2
) Cal
l vol
umes
as a
dvis
ed b
y TP
ALS
, CS&
S an
dM
EI
05
01
00
15
02
00
25
03
00
35
04
00
27/011/026/02
11/0216/0221/0226/02
3/038/03
13/0318/0323/0328/03
2/047/04
12/0417/0422/0427/04
2/057/05
12/0517/0522/0527/05
Esc
alat
ions
re
po
rte
d d
aily
20
10
Esc
alat
ions
re
po
rte
d d
aily
20
09
Esc
alat
ions
re
po
rte
d d
aily
20
08
TPA
LS
Com
plai
nts
-Pro
blem
s with
ATO
tele
phon
e sy
stem
s con
tinue
to i
mpa
ct T
PALS
staf
f con
tact
ing
prac
titio
ners
abo
ut th
eir
com
plai
nts.
177
Review into the Australian Taxation Office's Change Program
APPENDIX 10 — THE ATO’S EXPLANATION OF
UNANTICIPATED ERRORS
A.10.1 This appendix provides the ATO’s chronology of the following errors:
Notice of Assessment (NOA) issuing to clients advising to refer to Statement of Account (SOA), SOA is not attached (problem number 11 in Appendix 11).
Nil taxable income on NOA — this covers the issue where NOAs generated on 9 March 2010 had a zero taxable income amount, even though the account details were correct in the Integrated Core Processing (ICP) system and all other assessment details were correct on the NOA (problem number 12 in Appendix 11).
NOA/SOA Account issuing without cheques attached. This covers the situation where the NOA indicated payment had been made to a financial Institution as a direct credit, but the attached SOA indicated payment was by cheque, but no cheque was attached to the SOA (problem number 10 in Appendix 11).
A.10.2 The following chronologies are quoted from ATO correspondence to the IGT.
The following information provides the chronology of unanticipated delays including dates, key steps and external impacts.
Notice of Assessment (NOA) issuing to clients advising to refer to Statement of Account (SOA), SOA is not attached.
Impact
� The client has received an NOA, referring to monies on their associated SOA. The SOA isn’t attached, cheque clients have no cheque, EFT clients have the money in their bank account
� The client account is still intact — no financial integrity issues have been found, the only issue is that the client didn’t receive the money (which is a significant issue)
� Subsequent SOA’s that were sent will have been handled correctly — they will have included all transactions (including those intended for this SOA), and if appropriate will have included the cheque/EFT details.
� Numbers impacted — approximately 140,000
12 April 2010
� Issue identified (08 April) and analysis is the root cause linked to solution applied to INFRA 1175974 (to fully update GIC before issuing a refund) combined with the fix to reduce the volume of monthly statements sent to community
� Resolution involves data fix then reprocessing SOA
179
Review into the Australian Taxation Office's Change Program
14 April 2010
� Accounting batches processing put on hold pending resolution of issue
� Planned to resend statements to printer (14 April)
15 April 2010
� Outbound processes commenced and completed
� Confirmed sample pdf’s were okay
� Transmitted 140,000 print files to Salmat
� Expected printing to take place 16 April or over weekend
16 April 2010
� Confirmed final file received by Salmat at 7.30pm 15 April
� 60,000 SOA’s lodged by Salmat with Australia Post by 6pm in 3 states (NSW, QLD & VIC)
19 April 2010
� Balance of 80,000 SOA’s lodged with Australia Post between 11.30am and 6pm
Nil taxable income on Notice Of Assessment (NOA) — this covers the issue where NOA’s generated on 09 March 2010 had a zero taxable income amount, even though the account details were correct in Integrated Core Processing (ICP) system and all other assessment details were correct on the NOA.
09 March 2010
� Detected an issue where all NOAs were showing a zero taxable income. This resulted from the fix to ensure that where the taxable income is a negative value, the amount of taxable income on the return is zero rather than the negative value.
10 March 2010
� The root cause of the problem was identified and the issue contained to forms that posted to ICP between Wednesday 03 March when the NoA generate batch processed and the time the fix was deployed (2am, 05 March). All NOA's before and after this period are unaffected by the issue.
� Identified two actions which took place:
1. All work impacted was cancelled in Outbound (including physical output at Salmat) — this was achieved by destroying the current output
180
Review into the Australian Taxation Office's Change Program
2. Data fix to populate the new 'display taxable income field' with the correct value and regenerate the outbound messages
15 March 2010
� Data fix built within ICP and underwent final review / test closure on Monday 15 March pm. The intent was to execute the fix on 100 impacted NOA’s in the first instance, verify the output and then proceed with the remaining impacted files. Both executions were scheduled for evening of Monday 15 March with the intent of producing a file for SALMAT to print Tuesday 16 March.
17 March 2010
� Data fix built, tested, and executed on the impacted correspondence (approximately 200K impacted correspondence were generated) in the outbound database. Verification of the initial 58 (originally estimated to be 100, but 58 cases satisfied the criteria) was completed and fix proven. The original intent was to complete the fix / generation by late Tuesday 16 March — however some delays were encountered in regard to overnight activities. The revised estimate to complete the data fix and begin print file generation was estimated to be approximately 24hours. Anticipated delivery of the corrected file to SALMAT for printing Thursday 18 March (afternoon).
� All posted forms with a NOA pending/approved status (review items, suppressions, future credits) undertook the same data fix. Accounting review also suspended until the data fix completed.
19 March 2010
� Generated print files (post-scripts) sent to SALMAT for printing (99K of the 290K impacted correspondence)
� Sample of the post-script file sent to business to verify
� In parallel, files were packaged up and sent to SALMAT so that printing could commence once verification of corrected data was confirmed.
22 March 2010
� Generated remaining print files (post-scripts) sent to Salmat — approximately 190K (total is approximately 290K)
� Recommenced generation of print files
� Approximately 245K of the approximate 290K originally held correspondence (both NOA and SOA) related to the Nil taxable income issue were generated into print files and sent to SALMAT for printing and posting.
� Upon further review of the print files, an issue was identified where some NOAs were not updated with correct taxable income value. These files were stopped before correspondence was produced. Approximately 45K remained with the fix team to make updates and reprocess through outbound (Tuesday 23 March PM) for sending to SALMAT/posting (Wednesday 24 March AM).
181
Review into the Australian Taxation Office's Change Program
24 March 2010
� Remediation activities finalised on the remaining 45K impacted NOA.
� Investigation found that approximately 11K had no issue and could be released, 38K had to be data fixed in the same manner as the impacted correspondence above.
� The 38K impacted NOAs were generated as print files on Monday 29 March.
Notice of Assessment/Statement of Account issuing without cheques attached. This covers situation where the Notice of Assessment indicated payment had been made to a financial Institution as a direct credit, but the attached Statement of Account indicated payment was by cheque, but no cheque was attached to Statement of Account.
07 April 2010
� NoA advises that refund sent to clients nominated financial institution, but no FIA details on file. SOA issues with no cheque but advises refund cheque was sent.
� Increase of calls to CS&S, approximately 17,000 clients affected. Plan to quarantine any further cases before fix is deployed
12 April 2010
� Stop to placed against affected cheques to mitigate fraud risk
� Remediation — cancel the SoAs and reset the account with the credit so that the refund is re-triggered. 16K of 17K affected items should be delivered to Salmat tomorrow (8 April)
� Fix has been deployed and is currently being validated
14 April 2010
� 16,867 of 17,906 affected items have been confirmed as delivered to Salmat.
16 April 2010
� Permanent fix deployed and undergoes validation
21 April 2010
� Further 559 affected statements confirmed as delivered to Salmat
� Balance of 480 confirmed as pending refunder offset or has triggered a review item
182
Review into the Australian Taxation Office's Change Program
MA
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183
Review into the Australian Taxation Office's Change Program
AP
PE
ND
IX 1
1 —
SU
MM
AR
Y O
F T
HE
MA
IN P
RO
BL
EM
S E
NC
OU
NT
ER
ED
(U
P T
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010)
, R
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EV
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T A
TO
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IC C
OM
MU
NIC
AT
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ND
IMP
AC
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N T
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RS
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AC
TIT
ION
ER
S
A.1
1.1
The
sou
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eria
l for
the
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crip
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of
the
prob
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s be
low
is t
he m
inu
tes
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he A
TO
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tre
mee
ting
s an
d m
ater
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prov
ided
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ernm
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hair
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mis
sion
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f T
axat
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and
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mpr
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ffic
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A.1
1.2
Thi
s ap
pend
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ompr
ises
a g
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f th
e A
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ncom
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x pr
oces
sing
sys
tem
(re
pro
du
ced
on
the
next
pag
e) a
nd a
tab
le
cont
aini
ng d
escr
ipti
ons
of th
e id
enti
fied
pro
blem
s an
d r
elat
ed p
ubl
ic A
TO
com
mu
nica
tion
s.
185
Review into the Australian Taxation Office's Change Program
Sum
mar
y of
mai
n pr
oble
ms
(up
to 3
May
10)
F
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s &
pay
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12
54
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ata
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r
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inpu
ts
Pre
2004
ITR
10
Inco
me
Tax
amen
dmen
t &
pena
lty
calc
ulat
ions
WIN
TAP
LOD
GE
& P
AY(L
egac
y)
ICP
UI
(key
ed d
irect
ly)
WO
RK
MAN
AG
EMEN
TAQ
S(L
egac
y)
INP
UTS
Ele
ctro
nic
Pap
er
Occ
asio
nal p
roce
sses
A ta
xpay
er /
tax
agen
t lod
ges
an
orig
inal
form
, am
endm
ent
to
an o
rigin
al fo
rm
OR
paym
ent
base
d on
a
lodg
men
tob
ligat
ion
or
debt
E.g.
clie
nt
lodg
es IT
Rvia
eT
axor
mak
es a
pa
ymen
t by
cheq
ue o
r BPa
y
7
Smar
t Cap
ture
RDC
C
ELS
take
-on
IVR
(ITL)
IPPS
Sys
tem
s in
clud
e:
(Rep
orts
onl
y av
aila
ble
from
Sie
bel)
CO
GN
OS
(cub
es)
CO
GN
OS
cube
s
Onl
y so
me
data
use
d fo
r pr
e-f
ill of
E
LS, e
Tax
retu
rns
when
IT
Rpr
epar
ed
12
12
9
OU
TPU
TS
11
Dat
a up
date
s E
.g. C
andi
date
reco
rds
Cor
roge
nda
taba
se
Post
tran
sact
ion
Indi
vidua
ls ta
x re
turn
dat
a to
TR
DB
Post
tran
sact
ion
8
Com
pany
tax
retu
rn d
ata
to T
RDB
Actio
n Q
ueue
Ser
vice
-
Wor
k Al
loca
tion
syst
em fo
r AIS
exc
eptio
ns
Form
s &
pay
men
t pro
cess
ing
(FD
F)*
INC
OM
E TA
X R
ETU
RN
& P
AYM
ENT
PRO
CES
SIN
G (
Auto
mat
ed P
roce
ssin
g)
* FD
F-
Form
s D
efin
ition
Fac
ility
Form
rule
s se
t inc
lude
s:
•Es
tabl
ish
clie
nt a
ccou
nt a
nd ro
le
•Va
lidat
ion
rule
s (is
the
form
cor
rect
)
•FD
Fca
lcul
atio
n ru
les
(ass
essm
ent d
eter
min
atio
n)
•Bu
sine
ss ru
les
ATO
initi
ates
an
amen
dmen
t to
a ta
xpay
er’s
ITR
MultipleChannels
INB
OU
ND
INB
OU
ND
LOD
GE
& P
AYLO
DG
E &
PAY
Pre
proc
essi
ng,
Cap
ture
& V
alid
ate
EAI
ICP
ACC
OU
NTI
NG
ACC
OU
NTI
NG
OU
TBO
UN
DO
UTB
OU
ND
REG
ISTR
ATIO
NR
EGIS
TRAT
ION
BU
SIN
ESS
INTE
LLIG
ENC
EB
USI
NES
S IN
TELL
IGEN
CE
CR
M,C
ASE
& W
OR
K M
ANAG
EMEN
TC
RM
,CAS
E&
WO
RK
MAN
AGEM
ENT
Form
&
paym
ent
valid
atio
n
Form
spe
cific
va
lidat
ion
& ca
lcul
atio
ns
Lodg
men
tdue
da
tes,
& c
lient
re
gist
er u
pdat
ed
If no
erro
rs
ICP
UI
(man
ual)
Post
tran
sact
ion
(tran
sact
ion
is p
oste
d to
clie
nts
acco
unt /
rol
e)IC
P
Cal
cula
te p
enal
ties
and
inte
rest
;•F
TL•A
ccou
nt le
vel G
IC•T
ax s
hortf
all
•SIC
•IEP
•Ind
exat
ion
Eval
uate
tran
sact
ion;
•Sum
mar
ise
perio
d ba
lanc
e•A
sses
smen
t bal
ance
•Eva
luat
e pe
riod
bala
nce
ICP
UI (m
anua
l) fo
r man
ual f
inan
cial
/ ac
coun
ting
proc
essi
ng;
•For
ecas
t & u
pdat
e Pe
nalti
es &
Inte
rest
•Act
ion
non
purs
uit,
uncl
aim
ed c
redi
t•A
dd s
undr
y tra
nsac
tion
•Adj
ust e
ffect
ive
date
•Adj
ust p
erio
d•I
mpo
se m
anua
l pen
altie
s, c
ost &
fine
s•I
nitia
te b
alan
ce tr
ansf
er•I
nitia
te o
nlin
e of
fset
•Add
man
ual c
redi
t int
eres
t
ICP
UI (m
anua
l);•I
nitia
te m
anua
l cre
dit b
alan
ce re
ques
t
A ta
xpay
er/ta
x ag
ent r
ecei
ves
notif
icat
ion
E.g.
NoA
, SoA
, et
c.
Man
age
bala
nce
Proc
ess
debi
t bal
ance
;•C
redi
t per
iod
sele
ctio
n•C
redi
t elig
ibilit
y ch
ecks
•Cre
dit b
alan
ce re
ques
t•L
egac
y se
arch
(for
cre
dit)
Proc
ess
cred
it ba
lanc
e;•C
redi
t ris
k as
sess
men
t•I
OP
•Int
erna
l offs
ettin
g•E
xter
nal o
ffset
ting
•Car
ry fo
rwar
d lo
adin
g•C
reat
e re
fund
vou
cher
Any
requ
ired
corr
esor
refu
nd
is tr
igge
red;
•NO
A•S
OA
•Pen
alty
not
ice
•Rem
ittan
ce /
paym
ent a
dvic
e•C
hequ
e
Dis
burs
emen
t is
mad
e;•U
pdat
e st
atus
•Sen
d di
sbur
sem
ent
Out
boun
d re
ceive
Out
boun
d de
liver
y
Bulk
prin
t
IOD
L
Pape
r
SIEB
EL(C
CH
)
EFT
trans
actio
n to
ban
k
RBA
daily
file
Upda
te
Gen
eral
Le
dger
ACC
OU
NTI
NG
ACC
OU
NTI
NG
AIS
REFU
NDE
R–
uses
cre
dits
from
IC
Pto
offs
et a
ny le
gacy
deb
ts;
•Inte
rnal
offs
ettin
g•E
xter
nal o
ffset
ting
E.g.
for C
entre
link
oblig
atio
ns
betw
een
cons
entin
g pa
rtner
s
CRE
DIT
OFF
SET
–us
es
cred
its fr
om le
gacy
to o
ffset
an
y IC
Pde
bts
Ong
oing
bat
ch p
roce
sses
ru
n in
ICP;
•Mai
ntai
n ca
se•E
FT re
ject
s &
retu
rns
•Cal
cula
te d
ue d
ates
SIE
BE
LAc
tivity
cre
ated
, for
m
corr
ecte
d &
subm
itted
for
re-p
roce
ssin
g in
ICP
If al
erts
are
pre
sent
on
acco
unts
etc
., or
if ri
sk ru
les
fail,
revi
ew it
em a
ctiv
ity
is c
reat
ed, r
esol
ved
and
subm
itted
fo
r re-
proc
essi
ng in
ICP
OA
Can
dida
te s
elec
tion
Can
dida
tes
are
sele
cted
fro
m n
EDW
& st
ored
in O
A da
taba
se
Trea
tmen
t stra
tegy
A tre
atm
ent s
trate
gy is
ap
plie
d to
sel
ecte
d ca
ndid
ates
Dem
and
man
agem
ent
Trea
tmen
t m
anag
emen
t
Atta
ch c
andi
date
con
text
SQ
L
EAI
SIE
BE
L
ICP
OU
TBO
UN
D
TAR
GE
T S
YS
TEM
S
Inte
ract
ion
Inte
ract
ion
E.g.
cre
ate
auto
cas
e,
phon
e ca
ll ac
tivity
E.g.
sen
d de
bt
dem
and
lette
r
E.g.
pop
ulat
e cl
ient
risk
pro
file
If pe
riod
in D
RIf
no C
R fo
und
Trig
ger r
efun
d &
Issu
e co
rres
If pe
riod
in C
R
(Leg
acy)
ELS
ELS
Inte
grat
ion
laye
r
Dire
ct to
inte
grat
ion
laye
r
Dep
endi
ng o
n ch
anne
l;•F
ax g
atew
ay•I
mag
e ce
ntre
s•M
ail r
oom
•Sor
ting
& C
lass
ifyin
g•I
ndex
, Cla
ssify
&
Rout
e
Tran
sfer
s st
ruct
ured
fo
rms
& pa
ymen
tsIf
aler
ts o
n ac
coun
ts
etc.
May
upd
ate
Sie
bel c
ase
nED
WE
DW
Ente
rpris
e D
ata
War
ehou
se
ETL
Ext
ract
, Tra
nsfo
rm,
Load
Dat
a so
urce
d fro
m IC
PN
ew E
nter
pris
e D
ata
War
ehou
se
Dat
a so
urce
d fro
m L
egac
y &
ICP
If fa
ils ri
sk
rule
s
Trig
ger t
o cr
eate
S
iebe
l act
ivity
Che
ck o
ffset
deb
ts in
hie
rarc
hy o
rder
If er
rors
, su
spen
se
form
cr
eate
d
EAI
Inte
grat
ion
laye
r
BU
SIN
ESS
INTE
LLIG
ENC
EB
USI
NES
S IN
TELL
IGEN
CE
CO
GN
OS
ACTU
ATE
Rep
ortin
g an
d R
econ
cilia
tion
–O
ngoi
ng a
cros
s al
l cap
abili
ties
in th
e En
terp
rise
Solu
tion
EXEC
UTI
VE
MA
NAG
EM
EN
T
TRA
NSAC
TIO
NAL
CO
GN
OS
CO
GN
OS
/ AC
TUAT
EC
OG
NO
S
ICP
•Mai
ntai
n cl
ient
dem
ogra
phic
info
•Add
/ m
aint
ain
secu
rity
deta
ils•A
dd /
mai
ntai
n su
ppre
ssio
ns•A
dd /
mai
ntai
n cl
ient
acc
ount
s / r
oles
•Clie
nt c
alen
dar (
lodg
men
tobl
igat
ions
)•A
dd /
mai
ntai
n FI
A’s
REG
ISTR
ATIO
NR
EGIS
TRAT
ION
AIS
•Mas
ter o
f clie
nt re
gist
ratio
n de
tails
Upd
ates
BU
SIN
ESS
INTE
LLIG
ENC
EB
USI
NES
S IN
TELL
IGEN
CE
TRD
BTa
x lo
dgm
ent
data
pub
lishe
d
Clie
nt Id
entif
icat
ion
Cen
tre (I
D M
atch
ing)
CID
C
Info
rmat
ion
Mat
chin
g an
d An
alys
is S
yste
m
Gen
erat
es d
iscr
epan
cy
E.g.
inco
me
from
sha
res
Cas
e Ac
tioni
ng S
yste
mC
ompl
ianc
e tre
atm
ents
to
targ
et s
yste
ms
E.g.
•W
arni
ng le
tter
•Am
endm
ent
•Aud
itSI
EBEL
ICP
OU
TBO
UND
IMAS
CAS
Som
e da
ta u
sed
Inte
rface
to
allo
w vi
ewin
g of
C
IDC
data
for
disc
repa
ncie
s
TAR
GE
T SY
STE
MS
(Leg
acy)
Repo
rting
laye
rs:
To
outb
ound
(Leg
acy)
– –
1Th
e nu
mbe
r in
the
red
circ
les
corre
spon
d to
the
num
bers
in
the
tabl
e on
the
follo
win
g pa
ges
Inco
me
Tax
retu
rn p
roce
ssin
g th
roug
h A
TOsy
stem
s sh
owin
g ev
ents
hav
ing
a si
gnifi
cant
impa
ct
1
AIS
(Leg
acy)
Pass
es d
ata
to R
efun
der
E.g.
Act
ivity
Sta
tem
ents
Inte
grat
ion
laye
r
Exte
rnal
In
terfa
ces
ABR,
DIA
C,
DES
T
Dat
a ex
tract
s
ELS
ELS
ELS
Dire
ct to
ICP
Oth
er a
genc
y &
3rd
Party
dat
aE.
g. B
anks
, Cen
trelin
k, A
IIR
Dat
a so
urce
d fro
m A
IS a
nd
othe
r Leg
acy
syst
ems
Loop
s ba
ck to
Pos
t tra
nsac
tion
E.g.
Mon
thly
GIC
run
Dai
ly ro
ll up
s to
GL
Upd
ates
to S
iebe
l cas
e
ATO
user
inpu
ts
Pre
2004
ITR
Inco
me
Tax
amen
dmen
t &
pena
lty
calc
ulat
ions
WIN
TAP
LOD
GE
& P
AYLO
DG
E&
PAY
(Leg
acy)
ICP
UI
(key
ed d
irect
ly)
WO
RK
MAN
AG
EMEN
TW
OR
K M
ANA
GEM
ENT
AQS
(Leg
acy)
INP
UTS
Ele
ctro
nic
Pap
er
Occ
asio
nal p
roce
sses
A ta
xpay
er /
tax
agen
t lod
ges
an
orig
inal
form
, am
endm
ent
to
an o
rigin
al fo
rm
OR
paym
ent
base
d on
a
lodg
men
tob
ligat
ion
or
debt
E.g.
clie
nt
lodg
es IT
Rvia
eT
axor
mak
es a
pa
ymen
t by
cheq
ue o
r BPa
y
Smar
t Cap
ture
RDC
C
ELS
take
-on
IVR
(ITL)
IPPS
Sys
tem
s in
clud
e:
(Rep
orts
onl
y av
aila
ble
from
Sie
bel)
CO
GN
OS
(cub
es)
CO
GN
OS
cube
s
Onl
y so
me
data
use
d fo
r pr
e-f
ill of
E
LS, e
Tax
retu
rns
when
IT
Rpr
epar
edOU
TPU
TS
Dat
a up
date
s E
.g. C
andi
date
reco
rds
Cor
roge
nda
taba
se
Post
tran
sact
ion
Indi
vidua
ls ta
x re
turn
dat
a to
TR
DB
Post
tran
sact
ion
Com
pany
tax
retu
rn d
ata
to T
RDB
Actio
n Q
ueue
Ser
vice
-
Wor
k Al
loca
tion
syst
em fo
r AIS
exc
eptio
ns
C
G H I
74
5
6
13
10 11 12
1415
17
2
3
9
8
16
18 1920
186
Review into the Australian Taxation Office's Change Program
A.1
1.3
The
nu
mbe
r of
the
prob
lem
in th
e ta
ble
belo
w c
orre
spon
ds
to th
e gr
aphi
c on
the
prev
iou
s pa
ge.
Su
mm
ary
of
the
mai
n p
rob
lem
s en
cou
nte
red
(u
p t
o 3
Ma
y 20
10),
rel
evan
t A
TO
pu
blic
co
mm
un
icat
ion
s an
d im
pac
ts o
n t
axp
aye
rs a
nd
ta
x p
ract
itio
ner
s
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
1 In
com
e ta
x re
turn
s in
err
or
qu
eues
Fro
m 1
0 M
arch
201
0, th
e A
TO
was
enc
ount
erin
g er
rors
in s
ucc
essf
ully
in
put
ting
arou
nd
700
0 in
com
e ta
x re
turn
form
s on
to IC
P. N
o S
ieb
el a
ctiv
ity
wa
s cr
eate
d as
a r
esul
t and
the
syst
em d
id n
ot r
ecog
nis
e th
at th
ese
retu
rns
had
in fa
ct b
een
lod
ged.
Whe
n ta
x pr
actit
ion
ers
and
taxp
aye
rs c
alle
d to
ch
eck
on th
e p
rogr
ess
of th
eir
retu
rn,
wh
ere
thos
e re
turn
s e
ncou
nter
ed
the
se
erro
rs t
hey
wer
e to
ld b
y A
TO
sta
ff th
at th
e sy
stem
was
sho
win
g th
ese
retu
rns
as ‘n
ot lo
dged
’. T
he A
TO
late
r de
velo
ped
a d
atab
ase
to a
llow
AT
O s
taff
(suc
h as
cal
l ce
ntre
sta
ff) to
inpu
t a T
FN
and
see
if a
ret
urn
had
bee
n lo
dge
d fo
r th
at T
FN
.
As
at 1
6 A
pril
201
0, th
e n
umb
er o
f inc
ome
tax
retu
rns
in e
rror
que
ues
had
gr
ow
n to
alm
ost
9700
, w
ith m
ore
than
56
per
cent
bei
ng m
ore
than
30
days
ol
d. T
he m
ajor
ity o
f for
ms
wer
e no
t bei
ng m
anu
ally
re-
keye
d (
as a
t 19
Apr
i l –
750
retu
rn fo
rms
wer
e id
entif
ied
for
man
ual k
eyi
ng)
but
wer
e in
stea
d be
ing
‘re
pla
yed’
onc
e t
he r
oot
caus
e f
ixes
wer
e de
plo
yed.
As
at 2
3 A
pril,
the
num
ber
of r
etur
ns in
err
or q
ueue
s h
ad r
edu
ced
to a
rou
nd
500
0 af
ter
the
AT
O s
ucce
ssfu
lly in
put
thes
e re
turn
s on
to IC
P a
fter
repl
ayi
ng
retu
rns.
Thi
s le
ft ar
ound
500
of
thes
e re
turn
s m
ore
than
30
da
ys o
ld. T
he
AT
O id
entif
ied
that
alm
ost a
ll of
the
rem
ain
ing
form
s co
uld
be s
ucce
ssfu
lly
repl
aye
d af
ter
the
Apr
il re
leas
e, w
ith m
anu
al r
e-ke
yin
g on
ly n
eede
d of
45
0 re
turn
s.
As
at 3
Ma
y 20
10, o
nly
arou
nd
220
0 of
thes
e re
turn
s w
ere
in e
rror
que
ues
w
ith a
roun
d 20
0 be
ing
mor
e th
an 3
0 da
ys in
the
que
ue.
Rel
ated
to th
is,
on 1
9 A
pril
2010
, the
AT
O id
entif
ied
19,5
00 r
etur
ns th
at w
ere
proc
esse
d tw
ice
in IC
P. T
he A
TO
was
aw
are
that
taxp
aye
rs a
nd ta
x pr
actit
ione
rs m
ay
call
the
AT
O a
bout
this
. The
AT
O s
ched
ule
d to
man
ual
ly
canc
el a
rou
nd 8
000
of th
ese
retu
rns
from
28
Apr
il. A
s at
3 M
ay
201
0 th
e A
TO
w
as
inve
stig
atin
g an
app
ropr
iate
sol
utio
n fo
r am
endm
ents
and
sch
edul
es.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
No
AT
O c
omm
unic
atio
n in
an
y g
ener
al b
roa
dcas
t (su
ch a
s at
the
Fed
era
l P
arlia
men
t’s J
oint
Com
mitt
ee
of P
ublic
Acc
oun
ts a
nd A
udit
or S
enat
e E
cono
mic
s Le
gisl
atio
n C
omm
ittee
’s E
stim
ate
s he
arin
gs, i
n th
e m
edia
, in
prof
essi
ona
l ass
ocia
tion
ne
wsl
ette
rs/c
ircul
ars
or o
n th
e A
TO
we
bsite
) ex
plai
ned
to ta
x pr
actit
ion
ers
wh
y re
turn
s w
hic
h ha
d be
en r
ecei
ved
by
the
AT
O w
ere
clas
sifie
d by
ICP
as
’not
lod
ged’
.
No
AT
O c
omm
unic
atio
ns o
f the
issu
e w
ere
mad
e in
AT
O-in
itiat
ed ta
rget
ed
com
mun
icat
ion
s (s
uch
as e
ma
ils, l
ette
rs o
r ou
tbou
nd
tele
pho
ne c
alls
).
Onl
y on
ce A
TO
cal
l cen
tre
staf
f had
acc
ess
to th
e ne
wly
de
velo
ped
data
bas
e co
uld
the
y e
xpla
in w
het
her
a r
etur
n w
as r
ecei
ved
or n
ot. T
his
com
mun
icat
ion
dep
ende
d o
n ta
xpa
yers
an
d ta
x pr
actit
ione
rs in
itiat
ing
the
com
mun
icat
ion.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Up
to th
e po
int i
n tim
e at
whi
ch c
all c
ent
res
had
acc
ess
to th
is d
atab
ase,
ta
xpa
yers
and
tax
pra
ctiti
oner
s ph
oned
to c
hec
k on
the
pro
gres
s of
the
retu
rn
and
we
re to
ld th
e re
turn
wa
s no
t lod
ged.
Tax
pra
ctiti
oner
s th
en n
eede
d to
ac
cess
thei
r o
wn
reco
rds
to c
onfir
m lo
dgem
ent (
e.g.
the
ELS
val
idat
ion
rece
ipts
) an
d th
en c
all t
he A
TO
aga
in to
dis
cuss
the
pro
blem
with
AT
O s
taff,
on
ly to
be
told
that
the
mat
ter
had
bee
n ‘e
sca
late
d’.
Tax
paye
rs p
hon
ing
the
AT
O to
che
ck o
n th
e pr
ogr
ess
of th
eir
retu
rn a
nd to
ld th
at th
e re
turn
wa
s no
t lo
dge
d w
ere
left
with
the
impr
ess
ion
that
tax
pra
ctiti
oner
s ha
d lie
d or
wer
e m
ista
ken
wh
en th
ey
said
the
y ha
d lo
dge
d th
e r
etur
n on
the
taxp
aye
r’s b
eha
lf.
Whe
n ta
xpa
yers
and
tax
prac
titio
ners
we
re s
ure
that
the
retu
rn w
as
rece
ive
d b
y A
TO
(it’
s ju
st th
at th
e A
TO
cou
ldn’
t fin
d it)
, the
ir co
nfid
ence
wa
s re
duc
ed
in th
e A
TO
’s a
dmin
istr
atio
n.
Thi
s pr
oble
m a
dde
d to
del
ays
in is
suin
g as
sess
men
ts a
nd (
for
thos
e ex
pect
ing
refu
nds)
con
trib
ute
d to
a r
educ
tion
in e
xpec
ted
cash
flo
ws.
187
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
2 F
atal
Fo
rm D
efin
itio
n F
acili
ty (
FD
F)
erro
rs
Fro
m 1
9 M
arch
201
0, th
e A
TO
was
aw
are
of g
ener
ic e
rror
s th
at p
reve
nted
a
form
from
pro
cess
ing.
As
a re
sult
the
ICP
sys
tem
wo
uld
list
a re
turn
form
as
‘not
lodg
ed’.
Thi
s er
ror
occu
rred
in b
oth
auto
mat
ed a
nd
ma
nua
l pro
cess
es.
Alth
ough
the
AT
O h
ad a
wo
rkar
ound
of
wa
iting
24
hou
rs a
nd
then
tryi
ng
aga
in, a
n av
erag
e of
20
new
Inf
ra is
sues
we
re r
aise
d da
ily f
or p
ersi
ste
nt F
DF
er
rors
. The
AT
O in
vest
igat
ed
the
root
cau
se a
nd r
emed
iatio
n w
ork
req
uire
d.
On
28 A
pril
20
10, t
he A
TO
iden
tifie
d th
at a
sys
tem
s fix
wo
uld
addr
ess
the
maj
ority
of f
atal
FD
F e
rror
s im
pact
ing
man
ual p
roce
ssin
g. T
he A
TO
pla
nne
d to
re-
key/
re-s
ubm
it al
l for
ms
that
enc
oun
tere
d m
anu
al F
DF
err
ors,
wh
ich
was
ex
pect
ed
to c
om
men
ce w
eek
com
men
cing
3 M
ay
201
0. T
his
was
dep
ende
nt
on th
e re
solu
tion
and
depl
oym
ent v
erifi
catio
n of
a n
umb
er o
f Inf
ras:
Infr
a 83
3214
— d
eplo
yed,
und
ergo
ing
dep
loym
ent v
erifi
catio
n
Infr
a 11
7405
4 —
sch
edu
led
for
Wed
nesd
ay
28 A
pril
Infr
a 11
7009
5 —
s ch
edu
led
dat
e T
BA
Infr
a 11
8502
5 —
sch
edu
led
for
Thu
rsda
y 6
Ma
y
Fur
ther
ana
lysi
s w
oul
d be
re
qui
red
for
any
FD
F e
rror
ed fo
rms
that
wer
e n
ot
reso
lved
by
the
abo
ve fi
xes.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
No
AT
O c
omm
unic
atio
n in
an
y g
ener
al b
roa
dcas
t exp
lain
ed
to ta
x pr
actit
ione
rs w
hy
retu
rns
wh
ich
had
bee
n re
ceiv
ed
by
the
AT
O w
ere
clas
sifie
d by
IC
P a
s ‘n
ot lo
dge
d’.
No
AT
O c
omm
unic
atio
ns o
f the
issu
e w
ere
mad
e in
AT
O-in
itiat
ed ta
rget
ed
com
mun
icat
ion
s (s
uch
as e
ma
ils, l
ette
rs o
r ou
tbou
nd
tele
pho
ne c
alls
).
Onl
y on
ce A
TO
cal
l cen
tre
staf
f had
acc
ess
to th
e ne
wly
de
velo
ped
data
bas
e co
uld
the
y e
xpla
in w
het
her
a r
etur
n w
as r
ecei
ved
or n
ot. T
his
com
mun
icat
ion
dep
ende
d o
n ta
xpa
yers
an
d ta
x pr
actit
ione
rs in
itiat
ing
the
com
mun
icat
ion.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
paye
rs a
nd ta
x pr
actit
ione
rs p
hon
ing
to c
heck
on
the
prog
ress
of t
he
retu
rn w
ere
told
the
retu
rn w
as
not l
odg
ed. T
ax p
ract
itio
ners
then
ne
ede
d to
ac
cess
thei
r o
wn
reco
rds
to c
onfir
m lo
dgem
ent (
e.g.
the
ELS
val
idat
ion
rece
ipts
) an
d th
en c
all t
he A
TO
aga
in to
dis
cuss
the
pro
blem
with
AT
O s
taff,
on
ly to
be
told
that
the
mat
ter
had
bee
n ‘e
sca
late
d’.
Tax
paye
rs p
hon
ing
the
AT
O to
che
ck o
n th
e pr
ogr
ess
of th
eir
retu
rn a
nd to
ld th
at th
e re
turn
wa
s no
t lo
dge
d w
ere
left
with
the
impr
ess
ion
that
tax
pra
ctiti
oner
s lie
d o
r w
ere
mis
take
n w
hen
the
y sa
id th
ey
had
lod
ged
the
ret
urn.
Whe
n ex
tern
als
wer
e su
re th
at th
e re
turn
wa
s re
ceiv
ed b
y A
TO
(it’
s ju
st th
at th
e A
TO
cou
ldn’
t fin
d it)
, the
ir co
nfid
ence
wa
s re
du
ced
in th
e A
TO
’s a
dmin
istr
atio
n.
Thi
s pr
oble
m a
dde
d to
del
ays
in is
suin
g as
sess
men
ts a
nd (
for
thos
e ex
pect
ing
refu
nds)
con
trib
ute
d to
a r
educ
tion
in e
xpec
ted
cash
flo
ws.
3 E
LS
rep
ort
ing
fo
r ta
x p
ract
itio
ner
s n
ot
avai
lab
le
Tax
pra
ctiti
one
rs u
se E
lect
ron
ic L
odge
me
nt S
ervi
ce (
ELS
) re
port
s to
trac
k E
FT
/lodg
eme
nt/s
tatu
s of
thei
r cl
ient
s to
ass
ist
in th
e ru
nnin
g o
f the
ir bu
sine
ss.
Fro
m 1
0 M
arch
201
0 (a
t the
late
st),
non
e of
the
four
ELS
re
port
s fo
r ta
x pr
actit
ione
rs w
ere
ava
ilabl
e (t
hat i
s, th
e E
LS (
EF
T)
repo
rt, S
olic
ited
Clie
nt
List
, Clie
nt S
tatis
tics
repo
rt, a
nd
the
Uns
olic
ited
Du
e Lo
dgm
ent r
epor
ts).
H
ow
ever
, ELS
leg
acy
repo
rtin
g w
as
ava
ilabl
e, b
ut it
did
not
pro
vid
e up
to
date
clie
nt d
eta
ils a
nd
info
rmat
ion.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
On
17 F
ebru
ary
201
0, a
n A
TO
com
mun
icat
ion
to ta
x pr
actit
ione
rs (
‘e-li
nk’)
sa
id th
at th
e E
LS E
FT
rec
onci
liatio
n re
port
s w
ere
del
aye
d b
y 2
da
ys a
nd
that
th
e A
TO
was
wor
kin
g to
res
olve
this
Ho
we
ver,
tax
prac
titio
ners
cou
ld u
se th
e ta
x a
gent
s’ p
orta
l to
requ
est t
his
info
rmat
ion,
so
long
as
that
req
uest
was
lim
ited.
On
25 F
ebru
ary
201
0, a
n A
TO
com
mun
icat
ion
(‘e-l
ink’
) sa
id th
at th
e A
TO
w
as
wor
king
to r
esto
re th
e av
aila
bilit
y of
the
Sol
icite
d C
lient
Lis
t rep
orts
an
d th
e C
lient
Sta
tistic
s re
port
s.
188
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
F
rom
15
Mar
ch 2
010,
the
ELS
(E
FT
) re
port
was
ava
ilab
le w
ith a
wor
karo
und
and
fixe
d on
22
Mar
ch. F
rom
29
Mar
ch 2
010
, th
e A
TO
was
aim
ing
to fi
x th
e re
mai
nin
g 3
EL
S r
epor
ts a
s pa
rt o
f the
Apr
il re
leas
e u
pdat
e an
d h
ave
thes
e fix
es v
erifi
ed
by
5 M
ay
and
bac
klo
g of
rep
orts
pro
cess
ed b
y 6
Ma
y.
Ho
wev
er, a
s at
22
June
201
0 ta
x pr
actit
ion
ers
repo
rted
to th
e IG
T th
at th
ey
we
re s
till u
nabl
e to
get
clie
nt li
sts
thro
ugh
EL
S (
afte
r w
aiti
ng fo
ur d
ays
an
d th
en e
ma
iling
AT
O),
and
eve
n th
en th
e lis
ts w
ere
not
acc
urat
e or
up-
to-d
ate
.
On
30 M
arch
201
0, th
e A
TO
sen
t an
ema
il to
tax
prac
titio
ners
sa
ying
that
the
Sol
icite
d C
lient
Lis
t, C
lient
Sta
tistic
s re
port
, and
the
Uns
olic
ited
Due
Lo
dgm
ent r
epo
rt w
ere
una
vaila
ble.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
pra
ctiti
one
rs r
ecei
ved
inac
cura
te c
lient
list
s, in
clud
ing
rece
ivin
g d
etai
ls
for
taxp
aye
rs w
ho a
re n
ot th
eir
clie
nts
as w
ell
as n
ot r
ecei
vin
g de
tails
of t
he
taxp
aye
rs th
at a
re th
eir
clie
nts.
Tax
pra
ctiti
on
ers
are
unab
le t
o de
al w
ith th
e
AT
O o
n be
half
of th
ese
clie
nts
beca
use
the
age
nt c
anno
t est
ablis
h th
at th
ey
act f
or th
e cl
ien
t w
hen
cal
ling
the
AT
O fo
r th
ose
clie
nts
not o
n th
eir
lists
. Tax
pr
actit
ione
rs a
lso
are
unsu
re a
s to
wh
ich
clie
nts
have
mov
ed
to a
noth
er ta
x pr
actit
ione
r an
d th
eref
ore
unsu
re w
het
her
to c
onta
ct th
em fu
rthe
r.
The
se p
robl
ems
are
also
re
late
d to
pro
ble
ms
with
inco
rrec
tly a
ddre
ssed
co
rres
pon
den
ce.
4 P
rob
lem
s w
ith
am
end
men
t p
roce
ssin
g
Fro
m J
anua
ry 2
010,
the
AT
O d
id n
ot p
roce
ss d
ebit
ame
ndm
ents
to in
com
e ta
x as
sess
men
ts,
whe
ther
initi
ated
by
eith
er th
e A
TO
or
taxp
aye
rs. T
he A
TO
co
ntin
ued
to s
tock
pile
thes
e a
men
dmen
ts. T
his
was
due
to a
num
ber
of
prob
lem
s w
ith s
hort
fall
inte
rest
cha
rge
(SIC
), ta
x sh
ortfa
ll pe
nalty
an
d am
endm
ent n
otic
es. D
urin
g th
is ti
me
all a
me
ndm
ent
s w
ere
hel
d in
the
safe
ty
net,
until
the
y w
ere
rel
ease
d fr
om 3
Ma
y 2
010
. On
8 A
pril,
the
AT
O a
imed
to
man
ual
ly r
emit
SIC
in c
ases
that
sus
pen
ded
afte
r th
is d
ate.
Pro
blem
s w
ere
als
o e
xper
ienc
ed w
ith c
redi
t am
endm
ents
.
Diff
erin
g pr
oble
ms
requ
ired
diff
eren
t typ
es o
f res
olut
ions
.
1. In
corr
ect i
nter
est c
alcu
latio
ns
Fro
m 1
0 M
arch
201
0, th
e A
TO
sta
rted
pro
cess
ing
som
e ta
xpa
yer-
initi
ate
d cr
edit
ame
ndm
ents
(de
bit
amen
dmen
ts w
ere
held
in th
e sa
fety
net
pe
ndin
g a
fix o
f the
con
tinui
ng
inco
rrec
t SIC
cal
cula
tion
s, a
nd c
erta
in c
redi
t am
endm
ents
that
wer
e su
spe
nde
d fo
r ce
rtai
n re
aso
ns n
ee
ded
app
rova
l be
fore
bei
ng p
roce
sse
d) w
ith th
e kn
ow
ledg
e th
at th
ese
cre
dit
amen
dme
nts
ma
y u
nder
pa
y th
e in
tere
st o
n ov
erp
aym
ents
(IO
P).
The
AT
O d
ecid
ed
that
it
wa
s be
tter
to p
rovi
de
the
refu
nd a
nd
late
r fo
llow
up
with
an
IOP
pay
men
t la
ter
(pos
sibl
y af
ter
Tax
Tim
e 10
).
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
No
AT
O c
omm
unic
atio
n in
an
y g
ener
al b
roa
dcas
t exp
lain
ed
that
deb
it am
endm
ents
wer
e no
t be
ing
pro
cess
ed.
No
AT
O c
omm
unic
atio
ns o
f the
issu
e w
ere
mad
e in
AT
O in
itiat
ed ta
rget
ed
com
mun
icat
ion
s (s
uch
as e
ma
ils, l
ette
rs o
r ou
tbou
nd
tele
pho
ne c
alls
).
Tax
paye
rs a
nd ta
x pr
actit
ione
rs w
ho
initi
ated
a c
omm
unic
atio
n (c
hasi
ng u
p
the
prog
ress
of
the
amen
dme
nt),
wer
e to
ld th
at th
e pr
obl
em
had
be
en
‘esc
alat
ed’.
Tax
pa
yers
and
tax
prac
titio
ner
s m
ade
repe
ated
cal
ls c
heck
ing
on
the
prog
ress
to b
e to
ld th
e sa
me
thin
g.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
paye
rs e
xpec
ting
a re
fund
from
an
amen
dmen
t w
ere
forc
ed to
wai
t lo
nge
r th
an a
ntic
ipat
ed
for
thei
r re
fun
d, s
omet
imes
man
y m
onth
s.
Tax
pra
ctiti
one
rs in
curr
ed
unp
rodu
ctiv
e w
ork
in c
onta
ctin
g th
e A
TO
re
peat
edly
to c
heck
on
the
prog
ress
of
ame
ndm
ent
s. If
the
AT
O h
ad in
itia
ted
clea
r co
mm
unic
atio
n of
this
pro
blem
if a
nd w
hen
it fir
st b
eca
me
aw
are
of it
, th
en m
uch
of th
is a
dver
se im
pact
cou
ld h
ave
bee
n re
duc
ed
if no
t avo
ided
.
189
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
2.
Inco
rrec
t effe
ctiv
e da
tes
Fro
m 2
9 M
arch
201
0, th
e A
TO
bec
ame
aw
are
that
bot
h cr
edi
t and
deb
it am
endm
ents
wer
e no
t be
ing
pro
cess
ed
with
the
corr
ect e
ffect
ive
date
s fo
r S
IC c
alcu
latio
n p
urpo
ses.
Fix
es fo
r th
ese
prob
lem
s w
ere
dep
loye
d on
10
Apr
il an
d th
e ef
fect
iven
ess
of th
e fix
for
debi
t am
end
me
nts
wa
s ve
rifie
d on
28
Apr
il.
3. S
IC c
alcu
latio
n no
t app
ear
ing
on N
otic
es o
f Ass
essm
ent
(NO
As)
Fro
m 1
9 A
pril
201
0, th
e A
TO
con
side
red
a p
ropo
sal t
o re
leas
e al
l the
ret
urn
s in
the
SIC
saf
ety
net
as
it co
nsi
dere
d th
at, a
lthou
gh
the
calc
ulat
ion
bloc
k di
d no
t app
ear
on
all N
OA
s, th
e S
IC w
as c
alcu
late
d co
rrec
tly a
nd le
gal
adv
ice
conf
irme
d th
at th
e ab
senc
e of
dat
es d
id n
ot c
ompr
omis
e th
e n
otic
e. T
he A
TO
w
oul
d re
leas
e th
ese
retu
rns
by
4 M
ay
and
a f
ix w
as s
ched
uled
for
mid
-Ma
y.
4. S
econ
d am
end
me
nts
Rel
ated
to th
is p
rob
lem
, on
the
19 A
pril
2010
, the
AT
O id
entif
ied
prob
lem
s w
ith th
e pr
oces
sing
of s
eco
nd a
men
dmen
ts. I
t pla
ced
this
wor
k on
ho
ld.
On
23 A
pril,
it id
entif
ied
the
root
cau
se a
s H
ighe
r E
duc
atio
n L
oan
Acc
oun
t as
sess
me
nt d
ebt
s w
hic
h m
ani
fest
ed a
s an
inco
rrec
t inc
ome
tax
ame
ndm
ent
. T
he A
TO
cou
ld n
ot id
entif
y th
ese
cas
es u
ntil
afte
r th
ey
we
re r
ecei
ved
by
the
taxp
aye
r a
nd t
here
fore
dec
ided
that
thes
e ca
ses
wo
uld
be ’m
anag
ed
post
is
sue’
.
5. W
INC
AS
(a
pre-
exi
stin
g A
TO
sof
twar
e pr
ogr
am u
sed
to c
alcu
late
liab
ilitie
s fo
r am
endm
ents
)
As
at 1
9 A
pril,
the
AT
O p
roce
ssed
32
50 a
me
ndm
ent
s as
pa
rt o
f its
ram
p up
st
rate
gy
for
AT
O-in
itiat
ed
ame
ndm
ent
s, le
avin
g 22
00 a
men
dmen
ts y
et to
be
proc
esse
d. A
furt
her
3700
am
endm
ents
wer
e to
be
rele
ase
d pe
ndi
ng th
e ab
ove
SIC
rem
edia
tion
wo
rk. T
he A
TO
aim
ed to
pro
cess
all
the
back
log
of
WIN
CA
S r
ecor
ds (
appr
ox.
10,
000)
into
ICP
on
the
wee
k of
29
Apr
il.
5 E
xten
ded
del
ays
in r
eso
lvin
g h
igh
ris
k re
fun
d (
HR
R)
revi
ew it
ems
A h
igh
risk
refu
nd (
HR
R)
revi
ew
item
fla
gs th
at a
tax
retu
rn h
as tr
ipp
ed
cert
ain
risk
filte
rs. T
his
requ
ires
an A
TO
offi
cer
to d
eter
min
e w
het
her
the
retu
rn s
houl
d b
e su
bjec
t to
furt
her
inve
stig
atio
n. R
efun
ds fl
agg
ed
as H
RR
s ca
nnot
be
auto
mat
ical
ly is
sue
d to
the
taxp
aye
r w
itho
ut A
TO
offi
cer
revi
ew
, ac
cord
ing
to th
e A
TO
’s b
usin
ess
rule
s.
As
at th
e tim
e of
the
Janu
ary
2010
shu
tdo
wn
, the
AT
O h
ad 1
,893
sta
ndar
d
Hig
h R
isk
Ref
und
cas
es to
geth
er w
ith a
furt
her
6,7
98 c
ases
wh
ich
we
re
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
On
15 A
pril
20
10, t
he S
eco
nd C
omm
issi
one
r pu
blis
hed
a ge
nera
l upd
ate
on
the
AT
O w
ebsi
te s
ayi
ng:
‘We
curr
ently
hav
e ar
oun
d 10
0,00
0 re
turn
s fr
om in
div
idua
ls t
hat
we
estim
ate
are
ove
r 30
da
ys o
ld in
our
sys
tem
...
The
rea
lity
is th
at s
ome
case
s ta
ke lo
nge
r to
pro
cess
and
we
wo
uld
alw
ays
ho
ld s
ome
up
for
legi
timat
e re
ason
s.
190
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
bein
g w
ithhe
ld f
rom
com
plet
ion
due
to p
oten
tial f
rau
d-re
late
d is
sues
. Dat
a re
gard
ing
the
age
of t
he c
ases
on
han
d is
not
rea
dily
ava
ilab
le, h
ow
eve
r as
th
e la
rge
maj
ority
wer
e ca
ses
on h
and
as
a re
sult
of fr
aud-
rela
ted
issu
es, i
t is
likel
y th
at th
ey
had
bee
n on
han
d fo
r so
me
time
wh
ilst a
ppro
pria
te a
ctio
n w
as
und
erta
ken.
A n
umbe
r of
pro
blem
s ar
e re
late
d to
HR
Rs.
1. C
lient
ris
k pr
ofile
s
Fro
m 1
5 M
arch
201
0, th
e A
TO
iden
tifie
d th
at in
corr
ect ‘
clie
nt r
isk
prof
iles’
va
lues
for
a po
rtio
n of
the
clie
nt b
ase
(clie
nt r
isk
prof
ile a
ttrib
utes
wer
e tr
unca
ting)
wo
uld
me
an th
at th
ey
wo
uld
get t
heir
tax
retu
rns
or r
efun
ds
susp
end
ed m
ore
ofte
n. T
his
wo
uld
incr
ease
the
pote
ntia
l wor
klo
ad o
f the
A
TO
to m
anag
e re
fund
s. T
he A
TO
fixe
d th
is p
rob
lem
on
24 M
arch
an
d ve
rifie
d th
e ef
fect
iven
ess
of th
e fix
on
19
Ap
ril.
2. D
ela
yed
reso
lutio
n of
HR
Rs
Alth
ough
the
tota
l num
ber
of r
evie
w it
ems
trig
geri
ng a
HR
R r
evie
w w
as
sim
ilar
to th
e p
revi
ous
yea
r, m
ore
than
hal
f of
com
plet
ed
HR
R r
evie
w it
ems
took
21
da
ys o
r m
ore
to fi
nalis
e (a
sig
nifi
can
tly h
igh
er p
rop
ortio
n th
an
in p
rior
year
s).
As
at 1
7 M
ay
201
0, 2
0,47
8 H
RR
rev
iew
item
s ha
d be
en c
om
plet
ed,
with
81
77
revi
ew
ite
ms
in h
and.
As
at 6
Jun
e 2
010,
81
81 H
RR
rev
iew
item
s w
ere
on h
and.
At t
he s
ame
time
in 2
009
, on
ly 2
0 pe
r ce
nt o
f th
ese
revi
ew
ite
ms
(158
9) w
ere
less
than
15
days
ol
d. W
here
as a
t th
e sa
me
time
in 2
009
, 57
41
HR
R r
evie
w it
ems
wer
e on
ha
nd,
with
40
per
cen
t les
s th
an
15 d
ays
old
(22
64)
. The
AT
O a
dvis
ed th
e IG
T th
at th
e m
ain
reas
on fo
r th
e in
crea
sed
num
ber
of a
ged
HR
R r
evie
w
item
s in
20
10 w
as
that
som
e H
RR
rev
iew
ite
ms
also
invo
lved
oth
er p
rob
lem
s th
at n
eede
d to
be
reso
lved
be
fore
the
HR
R r
evie
w it
em c
ould
be
rem
oved
an
d th
e N
OA
issu
ed —
suc
h a
s th
ose
retu
rns
wh
ich
hav
e h
ad
thei
r pr
oces
sing
sus
pen
ded
beca
use
of o
ther
pro
blem
s w
ith th
e sy
stem
.
For
exa
mpl
e, w
e w
ou
ld n
ot r
ele
ase
refu
nds
that
app
ear
ed t
o be
frau
dul
en
t or
wh
ere
peop
le m
ay
ow
e m
one
y to
the
Com
mon
we
alth
, for
exa
mpl
e, o
the
r ag
enc
ies
such
as
Cen
tre
link
and
the
Ch
ild S
upp
ort A
genc
y. S
omet
imes
, w
e al
so c
heck
info
rmat
ion
rep
orte
d in
tax
retu
rns
wh
ere
we
find
disc
repa
ncie
s or
nee
d m
ore
info
rmat
ion
on p
artic
ula
r cl
aim
s.
Of t
he e
stim
ated
100
,000
, ap
pro
xim
atel
y 30
,000
ret
urns
are
in th
is
cate
gory
.’
On
20 A
pril
20
10, t
he A
TO
pub
lish
ed o
n its
we
bsite
a F
AQ
doc
ume
nt w
hic
h in
clu
ded
the
follo
win
g w
ord
ing
:
’Will
an
y re
fun
ds y
ou c
heck
be
dela
yed
mor
e th
an u
sual
?
The
AT
O d
oes
dela
y so
me
refu
nds
so th
at it
can
ver
ify th
ey
are
paya
ble.
T
hese
che
cks
cont
inue
bef
ore
and
afte
r o
ur s
yste
ms
shut
do
wn
to u
pgr
ad
e a
syst
em.
In o
rder
to p
reve
nt y
our
refu
nd b
ein
g de
laye
d, w
e m
ay
ask
you
to p
rovi
de
info
rmat
ion
quic
ker
than
usu
al.
We
may
atte
mpt
to c
onta
ct y
ou
by
phon
e.
But
wh
ere
we
cann
ot o
btai
n in
form
atio
n su
ppo
rtin
g th
e re
fund
, it m
ay
be
amen
ded
or n
ot i
ssue
d, d
epe
ndi
ng
on th
e ci
rcum
stan
ces.
’
On
22 A
pril
20
10, t
he A
TO
pub
lish
ed a
doc
um
ent o
n its
we
bsite
(‘In
com
e ta
x pr
oces
sing
— c
urre
nt p
roce
ssin
g pr
oble
ms
and
ho
w th
ey
mig
ht a
ffect
yo
u’):
’Issu
e
We
ma
y h
ave
take
n lo
nge
r th
at e
xpec
ted
to p
roce
ss y
our
inco
me
tax
retu
rn
and
issu
e a
refu
nd if
you
are
ent
itle
d to
one
. T
hese
del
ays
hav
e b
een
tem
pora
ry, a
nd
we
apo
logi
se f
or a
ny
inco
nve
nie
nce.
Ho
w t
his
affe
cts
you
Ref
unds
an
d a
sses
smen
ts h
ave
pro
gres
sive
ly b
een
issu
ing
sinc
e m
id-F
ebru
ary,
and
ma
ny
peo
ple
hav
e re
cen
tly r
ece
ive
d re
fund
s.
As
usua
l som
e r
efun
ds ta
ke lo
nger
to is
sue
if th
ey
invo
lve
com
ple
x ta
x af
fairs
or
we
nee
d to
ch
eck
the
leg
itim
acy
of a
cla
im fo
r a
refu
nd. I
t can
al
so ta
ke a
few
da
ys fr
om th
e tim
e w
e is
sue
a re
fund
for
it to
rea
ch it
s de
stin
atio
n as
it g
oes
thro
ugh
the
mai
ling
and
dis
trib
utio
n pr
oces
s.’
191
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
On
22 A
pril
20
10, t
he A
TO
pro
vid
ed fu
rthe
r in
form
atio
n at
the
Fed
eral
P
arlia
men
t’s J
oint
Com
mitt
ee
on
Pub
lic A
ccou
nts
and
Aud
it he
arin
g:
’Ms
LEY
— H
ow
ma
ny
[inco
me
tax
retu
rns]
are
out
sid
e th
e se
rvic
e st
anda
rd?
If yo
u w
ou
ld n
orm
ally
hav
e so
me
out
side
the
serv
ice
stan
dard
s th
en m
ayb
e th
at is
a n
umbe
r yo
u co
uld
incl
ude
.
Mr
But
ler
— T
here
are
108
,00
0 ou
tsid
e th
e se
rvic
e st
anda
rd to
day
[this
in
corr
ect f
igur
e w
as la
ter
corr
ecte
d to
18
8,0
00] …
CH
AIR
— H
ow
man
y of
thos
e c
an y
ou a
ttrib
ute
to a
pro
ble
m w
ith y
our
e-
fixes
?
Mr
But
ler
— N
one.
We
kno
w a
ll th
ese
case
s. W
e ar
e w
orki
ng th
rou
gh
them
. The
y ar
e a
ll ca
ses
wh
ere
ther
e is
a h
igh-
risk
refu
nd,
ther
e is
an
erro
r in
the
retu
rn. O
ur fi
xes
have
not
cau
sed
this
pro
ble
m.
Ms
LEY
— B
ut th
ey
are
dela
yed
beca
use
of a
bac
klog
— w
ould
that
be
fair
to
say
?
Mr
But
ler
— W
e st
ockp
iled
retu
rns
for
six
we
eks,
as
I men
tione
d, s
o w
e
had
700
,000
re
turn
s w
he
n w
e st
arte
d to
use
the
syst
em a
gain
. We
have
ca
ught
up
with
mos
t of t
hose
. The
y st
arte
d th
e pr
oces
sing
in th
e sy
stem
by
the
end
of F
ebru
ary.
As
of to
da
y, th
ere
are
15,
000
ind
ivid
ual t
axpa
yers
wh
o ar
e w
aiti
ng o
n a
refu
nd a
bove
50
days
in o
ur s
yste
m, b
ut th
ey
are
all c
ase
s w
her
e th
ere
is a
goo
d an
d va
lid r
easo
n th
e a
sses
smen
t has
not
gon
e ou
t.’
On
1 Ju
ne 2
010
at th
e S
enat
e E
cono
mic
s E
stim
ates
hea
rin
gs th
e A
TO
sai
d:
‘Mr
But
ler
— T
here
is n
o ba
cklo
g of
ret
urns
bec
ause
we
hav
e fe
wer
ret
urns
on
ha
nd b
ein
g sc
rutin
ised
, as
I sai
d be
fore
, tha
n at
this
tim
e la
st y
ear
or
the
year
bef
ore.
We
have
not
had
ret
urns
sitt
ing
arou
nd w
aiti
ng
to g
o in
to th
e sy
stem
to b
e p
roce
sse
d si
nce
ear
ly M
arch
and
we
hav
e m
et a
ll ou
r se
rvic
e
stan
dard
s si
nce
1 A
pril.
So
ther
e is
no
bac
klog
of r
etur
ns r
ight
no
w.
Of t
he
retu
rns
we
hav
e on
ha
nd, s
om
e w
ou
ld b
e ol
der
than
we
norm
ally
wo
uld
have
at t
his
time
of y
ear
. But
we
are
do
wn
no
w t
o in
div
idua
l tax
ret
urns
. T
he n
umbe
r th
at w
ere
file
d be
fore
ear
ly A
pril
that
hav
e n
ot b
een
proc
esse
d
is 6
,000
ret
urn
s. O
f tha
t, 3,
500
retu
rns
are
susp
ecte
d fr
aud
cas
es o
r ot
her
area
s w
her
e w
e w
ill n
ot is
sue
an a
sses
smen
t. S
o th
ere
are
2,50
0 tu
rns
on
han
d fo
r in
div
idua
ls fi
led
bef
ore
the
end
of A
pril
that
we
can
not
pro
cess
. La
rgel
y w
e ar
e w
aiti
ng
for
mor
e in
form
atio
n fr
om ta
x pr
actit
ione
rs a
nd
acco
unt
ants
to fi
nalis
e th
em. S
o th
ere
are
very
sm
all
num
ber
s of
ret
urns
on
han
d.’
192
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
The
se d
ela
ys in
HR
R c
ases
con
trib
uted
to d
ela
ys in
issu
ing
NO
As.
For
thos
e ta
xpa
yers
and
tax
pra
ctiti
oner
s ex
pect
ing
refu
nds,
this
had
the
effe
ct o
f re
duci
ng e
xpec
ted
cash
flo
ws.
Tax
pra
ctiti
one
rs in
curr
ed
unp
rodu
ctiv
e w
ork
in c
onta
ctin
g th
e A
TO
re
peat
edly
to c
heck
on
the
prog
ress
of t
heir
retu
rns.
If th
e A
TO
had
initi
ated
cl
ear
com
mun
icat
ion
of th
is p
robl
em if
and
whe
n it
first
bec
am
e a
war
e, th
en
muc
h of
this
ad
vers
e im
pac
t cou
ld h
ave
bee
n re
duce
d if
not a
void
ed.
Add
ition
ally
, ta
xpa
yers
and
tax
prac
titio
ner
s su
ffere
d th
e ef
fect
s of
red
uce
d ex
pect
ed
cash
flo
ws
due
to th
e co
ntrib
utio
n of
this
pro
blem
to d
ela
ys.
As
a re
sult
taxp
aye
rs a
nd ta
x pr
actit
ion
ers
hav
e re
duc
ed
thei
r co
nfid
ence
in
the
AT
O’s
abi
lity
to a
dmin
iste
r th
e sy
stem
.
6 D
ata
tran
sfer
fro
m t
he
inte
gra
ted
co
re p
roce
ssi
ng
(IC
P)
sys
tem
to
th
e ta
x re
turn
dat
abas
e (T
RD
B)
imp
acti
ng
on
pay
as
you
go
(P
AY
G)
inst
alm
ents
Dat
a fr
om t
ax r
etur
ns p
roce
ssed
in th
e IC
P s
yste
m a
re ‘r
eplic
ated
’ on
the
TR
DB
. The
PA
YG
sys
tem
(a
pre-
exi
stin
g sy
stem
wh
ich
is s
epar
ate
from
the
ICP
sys
tem
an
d th
e T
RD
B)
uses
the
mos
t rec
ent
tax
retu
rn in
form
atio
n fr
om
the
TR
DB
to g
ener
ate
PA
YG
inst
alm
ents
not
ifica
tions
.
Fro
m 1
Mar
ch 2
010,
the
AT
O w
as
aw
are
that
the
TR
DB
-PA
YG
inte
rfac
e w
as
not r
unn
ing
due
to th
ree
mai
n is
sues
: the
slo
wn
ess
of d
ata
bein
g se
nt fr
om
the
ICP
sys
tem
to th
e T
RD
B; t
he la
rge
num
ber
of i
ncom
e ta
x re
turn
s be
ing
re
ject
ed
by
the
TR
DB
; and
da
ta q
ualit
y is
sue
s in
the
inco
me
tax
retu
rns
tha
t ha
ve b
een
loa
ded
into
the
TR
DB
.
The
AT
O r
esol
ved
som
e of
the
und
erly
ing
prob
lem
s b
y th
e tim
e of
the
31
Mar
ch 2
010
PA
YG
inst
alm
ent
gene
rate
dat
e.
Ho
we
ver,
rem
aini
ng p
rob
lem
s re
sulte
d in
aro
und
46,
000
PA
YG
inst
alm
ents
bei
ng
gene
rate
d on
200
8 in
com
e fig
ures
, ev
en th
oug
h th
ose
taxp
aye
rs h
ad lo
dged
thei
r 20
09 ta
x re
turn
s.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
On
15 A
pril
20
10, t
he A
TO
pub
lish
ed a
fact
s sh
eet o
n its
we
bsite
sa
ying
(a
mon
gst o
ther
thin
gs),
’Che
ck y
our
PA
YG
inst
alm
ent
rate
or
amou
nt
If yo
u ar
e af
fect
ed b
y an
inco
me
tax
retu
rn p
roce
ssin
g de
lay,
the
PA
YG
in
stal
men
t rat
e o
r am
ount
on
your
Qua
rter
2 o
r Q
uart
er 3
act
ivity
sta
tem
ent
m
ay
still
be
ba
sed
on y
our
inco
me
tax
asse
ssm
ent f
or th
e pr
evio
us in
com
e
year
an
d w
ill r
em
ain
so u
ntil
your
cur
rent
ret
urn
is p
roce
sse
d.
In th
e in
terim
, if
you
thin
k th
e am
ount
or
rate
we
have
cal
cula
ted
will
mea
n yo
u w
oul
d pa
y m
ore
(or
less
) th
an y
our
exp
ect
ed ta
x fo
r th
e c
urre
nt in
com
e ye
ar,
you
ma
y ch
oose
to v
ary
your
PA
YG
inst
alm
ent r
ate
or a
mou
nt.
You
will
then
use
the
upda
ted
am
ount
or
rate
for
the
rem
aini
ng q
uar
terl
y in
stal
men
ts in
the
inco
me
yea
r, u
nles
s yo
u va
ry a
gain
.
A g
uide
on
how
to
vary
yo
ur P
AY
G in
stal
men
ts is
ava
ilabl
e on
our
we
bsite
.’
The
AT
O a
lso
sent
out
this
info
rmat
ion
to ta
x pr
actit
ion
ers
as
part
of t
he m
ail
out o
f Act
ivity
Sta
tem
ents
.
193
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
O
n 19
Apr
il, t
he A
TO
sw
itche
d of
f th
e tr
ansf
er o
f dat
a fr
om th
e IC
P s
yste
m to
th
e T
RD
B a
fter
it id
entif
ied
data
issu
es. T
he im
pact
s of
thes
e is
sues
incl
ud
ed
inco
rrec
t PA
YG
inst
alm
ent r
ates
on
Act
ivity
Sta
tem
ents
(53
24 A
pril
2010
A
ctiv
ity S
tate
men
ts w
ere
proc
esse
d o
n 12
Apr
il us
ing
out
-of-
date
TR
DB
da
ta).
Fro
m 2
8 A
pril,
the
tran
sfer
func
tiona
lity
from
the
ICP
sys
tem
to th
e T
RD
B w
as s
witc
hed
on,
but
the
tran
sfer
func
tion
ality
from
the
TR
DB
to th
e IC
P s
yste
m w
as
switc
hed
off.
The
AT
O d
ecid
ed to
ver
ify d
ata
befo
re th
e Ju
ne 2
010
gen
erat
e da
te a
nd to
de
plo
y fix
es b
efo
re T
axT
ime
10.
The
tran
sfer
of d
ata
from
the
ICP
sys
tem
to T
RD
B a
lso
affe
cted
oth
er a
rea
s of
the
AT
O, i
nclu
ding
:
- P
re-f
ill fo
r e-
Tax
and
tax
age
nt p
orta
ls r
ead
from
the
TR
DB
. The
re w
as
a po
tent
ial f
or fo
rms
to b
e co
mpl
eted
inco
rrec
tly.
- S
TA
C (
a pr
e-ex
istin
g sy
ste
m)
disp
laye
d in
corr
ect
or m
issi
ng t
ax r
etur
n fo
rm d
ata.
The
re w
as
a po
ten
tial f
or A
TO
sta
ff to
pro
vide
inco
rrec
t in
form
atio
n to
tax
paye
rs a
nd
tax
prac
titio
ners
.
- R
even
ue r
epor
ting
wa
s un
abl
e to
pro
vid
e an
aly
sis
of h
igh
leve
l rev
enue
co
llect
ion
info
rmat
ion
rece
ive
d fr
om th
e A
TO
’s R
even
ue A
naly
sis
Bra
nch
as r
equ
ired.
- E
xtra
cts
for
Cen
trel
ink
wer
e co
mpr
omis
ed.
The
re w
as a
ris
k of
not
m
eetin
g th
e 27
Apr
il 20
10 d
eadl
ine
for
inp
uttin
g th
e d
ata
req
uire
d fo
r th
e ne
xt s
ched
uled
Dat
a M
atch
ing
Age
ncy
cycl
e w
ith C
ent
relin
k, V
eter
ans
Affa
irs a
nd th
e F
amili
es A
ssis
tanc
e O
ffice
.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
A s
igni
fican
t nu
mbe
r of
taxp
aye
rs r
ecei
ved
PA
YG
inst
alm
ent
amou
nts
base
d on
20
08 in
com
e am
ount
s. T
axp
aye
rs a
nd th
eir
repr
esen
tativ
es in
curr
ed
unn
eces
sary
exp
ense
in c
ont
actin
g th
e A
TO
to u
nder
sta
nd t
he b
asis
for
the
AT
O-n
otifi
ed P
AY
G in
stal
men
t am
ount
. It s
houl
d be
not
ed th
at a
ny
inac
cura
te P
AY
G in
stal
men
t am
ount
not
ifie
d b
y th
e A
TO
cou
ld b
e co
rrec
ted
by t
axpa
yers
lodg
ing
a P
AY
G in
stal
men
t var
iatio
n. I
f th
e ta
xpay
er v
aria
tion
und
eres
timat
es
the
actu
al a
mou
nt fo
r th
e fin
anci
al y
ear
by
mor
e th
an
15 p
er c
ent
the
y ar
e lia
ble
for
a pe
nal
ty. T
axpa
yers
wo
uld
then
incu
r th
e ex
pens
e of
est
imat
ing
the
PA
YG
inst
alm
ent
amou
nt a
nd p
repa
ring
and
lo
dgi
ng
a va
riatio
n w
ith th
e A
TO
, eve
n th
oug
h th
e A
TO
was
in p
osse
ssio
n of
th
e in
form
atio
n to
cor
rect
ly c
alc
ulat
e th
ese
am
ount
s.
194
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
7 L
ow
inco
me
tax
off
set
and
no
n r
esid
ents
Und
er th
e ta
x la
ws,
non
-res
iden
ts a
re n
ot e
ntit
led
to th
e lo
w in
com
e ta
x of
fset
(L
ITO
). F
rom
29
Mar
ch 2
010
, th
e A
TO
bec
ame
aw
are
that
the
ICP
sys
tem
w
as
hold
ing
arou
nd
17,0
00 n
on-r
esid
ent
tax
retu
rns
in s
uspe
nse
and
whe
n th
e su
spe
nse
wa
s re
leas
ed
the
retu
rn h
ad t
he L
ITO
app
lied.
The
rea
son
wa
s th
at th
e co
rrec
tion
of th
e su
spen
se c
han
ged
the
clie
nt to
a n
on-r
esid
ent
, ho
we
ver
the
LIT
O c
alcu
late
d pr
evio
usly
wa
s no
t res
et. A
lthou
gh
this
pro
blem
w
as
fixed
on
12
Apr
il, th
e A
TO
did
not
rel
ea
se th
ese
retu
rns
from
sus
pens
e un
til a
fter
the
Apr
il re
leas
e up
date
(ar
oun
d 2
8 A
pril)
.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
No
AT
O c
omm
unic
atio
n in
an
y g
ener
al b
roa
dcas
t exp
lain
ed
wh
y th
ese
type
s of
ret
urns
wer
e b
ein
g de
laye
d.
No
AT
O c
omm
unic
atio
ns o
f the
issu
e w
ere
mad
e in
AT
O-in
itiat
ed ta
rget
ed
com
mun
icat
ion
s (s
uch
as e
ma
ils, l
ette
rs o
r ou
tbou
nd
tele
pho
ne c
alls
).
The
re is
no
evid
ence
that
AT
O c
all c
entr
e st
aff
wer
e ab
le to
exp
lain
the
reas
ons
for
dela
ys o
f the
se t
ypes
of r
etur
ns if
thes
e ta
xpa
yers
or
thei
r re
pres
enta
tive
s ca
lled
to a
sk w
hy
thes
e re
turn
s ha
d b
een
del
aye
d.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
The
se d
ela
ys in
non
-res
iden
t LI
TO
cas
es c
ontr
ibut
ed
to d
ela
ys in
issu
ing
NO
As.
For
thos
e ta
x pr
actit
ione
rs a
nd
taxp
aye
rs e
xpec
ting
refu
nds,
this
had
th
e ef
fect
of r
educ
ing
exp
ecte
d ca
sh fl
ow
s.
8 P
aym
ent
gre
ater
th
an l
iab
ility
re
view
item
A p
aym
ent g
reat
er th
an li
abili
ty r
evie
w it
em is
des
igne
d to
ens
ure
that
the
AT
O d
oes
not r
efun
d a
n ov
erp
aym
ent t
hat i
s su
bse
quen
tly d
isho
nour
ed. T
he
AT
O in
tend
ed
that
the
revi
ew
item
sho
uld
exi
st fo
r th
ree
days
afte
r th
e pa
yme
nt is
mad
e, th
en a
utom
atic
ally
clo
se s
o th
at th
e fu
nds
coul
d b
e re
leas
ed.
On
19 A
pril
20
10, t
he A
TO
bec
ame
aw
are
that
the
auto
mat
ic c
losi
ng
of th
e
revi
ew
item
wa
s no
t occ
urrin
g a
nd r
efun
ds w
ere
bein
g he
ld in
def
inite
ly.
As
at 1
9 A
pril,
ther
e w
ere
aro
und
60
5,00
0 re
vie
w it
ems
hol
din
g $3
71 m
illio
n
dolla
rs;
with
the
larg
est r
efun
d am
ount
ing
to a
roun
d $2
03 m
illio
n, a
lthou
gh
arou
nd 5
00,0
00
of a
ffect
ed ta
xpa
yers
had
re
fund
s of
less
than
50
cent
s.
The
AT
O p
ropo
sed
to a
utom
atic
ally
rel
eas
e o
n 28
Apr
il th
ose
rev
iew
item
s th
at w
ere
mor
e th
an th
ree
da
ys o
ld a
nd
invo
lved
a r
efun
d of
less
than
$2
0,0
00 (
allo
win
g th
e A
TO
to r
evie
w la
rge
dolla
r va
lue
item
s be
fore
rel
easi
ng
them
) an
d gr
eate
r th
an 5
0 ce
nts
(to
pre
vent
per
form
ance
issu
es e
xpec
ted
from
500
,00
0 re
cord
s).
A d
ata
fix w
as
part
ially
de
plo
yed
on 1
9 A
pril,
but
no
retu
rns
we
re is
sued
as
a re
sult.
On
28 A
pril,
the
AT
O c
han
ged
the
crite
ria fo
r th
ose
retu
rns
to b
e re
leas
ed to
tho
se w
hic
h ha
d a
n ab
senc
e of
a lo
dgem
ent o
blig
atio
n. T
his
wo
uld
rele
ase
abo
ut 2
7,00
0 re
turn
s w
ith p
aym
ents
tota
lling
aro
und
$2
40
mill
ion,
of
wh
ich
mos
t w
ould
be
offs
et b
y ot
her
debt
s. T
he A
TO
pr
opos
ed to
ru
n re
gula
r d
ata
fixes
unt
il a
perm
ane
nt fi
x w
as d
eplo
yed.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
No
AT
O c
omm
unic
atio
n in
an
y g
ener
al b
roa
dcas
t exp
lain
ed
to ta
xpa
yers
or
tax
prac
titio
ner
s w
hy
thes
e ty
pes
of c
redi
ts w
ere
bei
ng
held
mor
e th
an th
ree
days
.
No
AT
O c
omm
unic
atio
ns o
f the
issu
e w
ere
mad
e in
AT
O-in
itiat
ed ta
rget
ed
com
mun
icat
ion
s (s
uch
as e
ma
ils, l
ette
rs o
r ou
tbou
nd
tele
pho
ne c
alls
).
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
For
thos
e ta
xpa
yers
an
d ta
x pr
actit
ione
rs e
xpec
ting
refu
nd
s, th
is h
ad th
e ef
fect
of r
educ
ing
exp
ecte
d ca
sh fl
ow
s.
195
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
Thi
s re
leas
e st
rate
gy
was
ref
ined
by
3 M
ay,
to
divi
de
the
affe
cted
rev
iew
ite
ms
into
thre
e gr
oups
:
Gro
up 1
— n
on-
paym
ent c
redi
ts in
corr
ectly
trig
geri
ng th
is r
evie
w it
em —
as
at 3
Ma
y 1
15 w
ere
still
rem
ain
ing;
Gro
up 2
— a
ctua
l pa
ymen
ts th
at w
ere
mor
e th
an th
e lia
bili
ty —
the
AT
O
inte
nde
d to
rel
ease
thes
e w
ith s
ome
con
ditio
ns to
gu
ard
aga
inst
ref
und
ing
pre-
pa
ymen
ts (
16,2
16
revi
ew
item
s) a
nd te
ntat
ivel
y sc
hed
ule
d th
e re
leas
e fo
r 4
Ma
y; a
nd
Gro
up 3
— r
evie
w it
ems
on d
ebi
t cas
es–t
he
AT
O in
tend
ed
to r
ele
ase
on
3 M
ay
all
of th
ese
case
s as
a lo
we
r pr
iori
ty c
lean
-up
as th
is r
evie
w it
em d
id n
ot
affe
ct d
ebit
bala
nce
proc
essi
ng
(mor
e th
an 4
50,0
00
revi
ew
item
s).
The
AT
O p
ropo
sed
to c
ons
ider
pre
-pa
ymen
ts w
her
e it
had
rece
ived
a
paym
ent
but
not
yet
the
form
, to
ensu
re th
at t
he fo
rm h
ad n
ot b
een
subm
itted
bu
t w
as s
tuck
in e
rror
qu
eues
or
susp
ens
e.
9 D
elay
s w
ith
ass
ign
ing
new
tax
fil
e n
um
ber
s (T
FN
s) w
her
e fe
ared
co
mp
rom
ised
The
AT
O w
ill n
ot is
sue
a N
OA
if th
e T
FN
is s
uspe
cte
d to
ha
ve b
een
com
prom
ised
(su
ch a
s so
me
one
usi
ng a
TF
N th
at le
gitim
atel
y be
lon
gs to
an
oth
er ta
xpa
yer)
. In
thes
e ci
rcum
stan
ces,
und
er th
e pr
e-e
xist
ing
syst
ems,
th
ere
have
be
en
ext
end
ed d
ela
ys in
ass
igni
ng
a ne
w T
FN
to p
eopl
e. T
he
AT
O in
tend
ed
to b
uild
a s
ingl
e b
ack-
end
regi
ster
, w
hich
wo
uld
hel
p to
re
duc
e tim
efra
mes
. The
AT
O d
id n
ot c
ompl
ete
the
bui
ld o
f the
sin
gle
bac
k-e
nd
regi
ster
. App
roxi
mat
ely
230
0 T
FN
s w
ere
tho
ught
to b
e co
mpr
omis
ed.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
The
AT
O in
itiat
ed a
n o
utbo
und
tele
pho
ne c
am
paig
n to
con
tact
all
affe
cted
ta
xpa
yers
bet
wee
n 2
1 A
pril
2010
an
d 18
Ma
y 20
10. T
he A
TO
adv
ises
that
a
tota
l of 2
377
calls
wer
e m
ade
to b
oth
ind
ivid
uals
(1
468)
an
d ta
x a
gent
s (9
09)
resu
lting
in 1
947
succ
essf
ul c
onta
cts.
Clie
nts
wer
e ad
vise
d th
at w
e w
ere
:
’wor
king
har
d to
res
olve
thes
e p
robl
ems
and
expe
ct to
be
gin
[sic
] As
a re
sult
of th
ese
dela
ys th
e A
TO
has
put
in p
lace
a n
umbe
r of
saf
egu
ards
to
ensu
re th
e pr
ivac
y an
d pr
otec
tion
of y
our
per
sona
l tax
info
rmat
ion.
The
se s
afeg
uard
s pr
eve
nt th
e a
utom
atic
issu
ing
of a
sses
smen
ts a
nd
activ
ity o
n yo
ur a
ccou
nt u
ntil
a n
ew
TF
N h
as b
een
issu
ed.
Not
e: I
n so
me
circ
umst
ance
s w
e st
ill h
ave
the
abili
ty to
ma
nua
lly
und
erta
ken
activ
ity o
n yo
ur a
ccou
nt fo
llow
ing
app
ropr
iate
ve
rific
atio
n pr
oces
ses.
Unt
il th
e A
TO
adv
ises
you
of
your
ne
w T
FN
yo
u m
ay
still
use
the
exi
stin
g T
FN
for
any
norm
al p
urpo
se s
uch
as c
omp
letin
g a
TF
N d
ecla
ratio
n or
op
eni
ng
a B
ank
acco
unt.
196
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
Whe
n yo
ur T
FN
is r
epla
ced,
yo
u w
ill n
eed
to q
uote
yo
ur n
ew
TF
N to
an
y in
stitu
tion
to w
hich
yo
u ha
ve p
revi
ousl
y q
uote
d yo
ur T
FN
, for
exa
mp
le,
inve
stm
ent
bod
ies,
em
plo
yers
, C
entr
elin
k, D
epa
rtm
ent o
f Ve
tera
ns A
ffairs
(D
VA
) an
d su
per
annu
atio
n fu
nds
Info
rm th
e cl
ient
that
the
AT
O a
polo
gis
es
for
the
dela
y b
ein
g e
xper
ienc
ed in
issu
ing
the
new
TF
N."
With
the
clie
nt’s
per
mis
sio
n, o
pera
tives
wor
ked
thro
ugh
a fe
w q
uest
ions
in
orde
r to
red
uce
an
y fu
rth
er in
conv
eni
enc
e, s
uch
as
dela
ys w
ith lo
dgm
ent o
r pr
oces
sing
of a
n In
com
e T
ax R
etur
n
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
The
se d
ela
ys in
com
prom
ise
d T
FN
cas
es c
ontr
ibut
ed to
del
ays
in is
suin
g
NO
As.
For
thos
e ta
xpa
yers
and
tax
prac
titio
ners
exp
ectin
g re
fund
s, th
is h
ad
the
effe
ct o
f red
ucin
g e
xpec
ted
cash
flo
ws.
10
Sta
tem
ent
of
Acc
ou
nt
(SO
A)/
No
tice
of
As
ses
smen
t (N
OA
) in
corr
ect
Ele
ctro
nic
Fu
nd
s tr
ansf
er (
EF
T)/
cheq
ue
advi
ce
On
30 M
arch
201
0, th
e A
TO
bec
ame
aw
are
tha
t NO
As
we
re b
ein
g is
sued
to
taxp
aye
rs a
dvis
ing
them
that
ref
unds
we
re s
ent t
o ta
xpa
yers
’ nom
inat
ed
finan
cial
inst
itutio
n. H
ow
eve
r, th
e A
TO
had
no
EF
T d
etai
ls fo
r th
e ta
xpa
yer
on
file
and
the
taxp
aye
r h
ad n
ot a
sked
the
refu
nd to
be
ma
de b
y E
FT
. S
OA
s ha
d al
so is
sued
with
no
che
que
atta
ched
but
adv
ised
taxp
aye
rs th
at a
ref
und
cheq
ue w
as
sent
. Aro
und
580
0 ta
x a
gent
s re
pres
ent
ing
aro
und
17,
000
taxp
aye
rs w
ere
affe
cted
. The
AT
O s
tart
ed r
ecei
vin
g ca
lls fr
om ta
xpa
yers
and
th
eir
repr
esen
tativ
es.
On
14 A
pril,
the
AT
O c
ance
lled
the
refu
nds
and
re-i
ssue
d th
e N
OA
s an
d S
OA
s. T
he A
TO
dep
loye
d a
n e-
fix o
n 16
Apr
il. A
s at
23
Apr
il, it
was
aw
aiti
ng
verif
icat
ion
of th
e ef
fect
ive
impl
emen
tatio
n o
f th
e e-
fix, a
s al
mos
t all
re-t
rigg
ered
ref
unds
we
re w
ith th
e pr
inte
rs,
with
the
rem
ain
ing
300
still
w
ork
ing
thei
r w
ay
thro
ugh
the
AT
O’s
sys
tem
s. A
roun
d 4
0 st
ill r
equ
ired
man
ual
inte
rve
ntio
n. A
s at
30
Apr
il, 1
7,6
08 (
98.
3 pe
r ce
nt)
of th
e 17
,90
6 af
fect
ed r
etur
ns
wer
e w
ith th
e p
rinte
rs. T
he r
emai
nder
of t
he
retu
rns
wer
e pr
ogre
ssin
g th
roug
h th
e A
TO
’s r
efun
der
syst
em (
a pr
e-e
xist
ing
lega
cy
syst
em)
as th
ey
had
to b
e re
-pro
cess
ed fo
r a
seco
nd ti
me.
The
AT
O a
dvis
es th
at it
com
plet
ed th
e p
aym
ent o
f int
eres
t to
thos
e w
ho
are
kno
wn
to b
e o
we
d gr
eate
r th
an $
50
in S
ept
embe
r 2
010,
as
agre
ed
thro
ugh
co
nsu
ltatio
n w
ith ta
x pr
actit
ion
ers
and
the
ir pr
ofes
sio
nal b
odie
s. A
mou
nts
less
than
$50
hav
e no
t ye
t be
en p
oste
d to
acc
ount
s; th
e pr
opos
ed c
our
se o
f ac
tion
is to
pos
t th
e cr
edits
to th
e ac
coun
ts a
nd th
en w
rite
them
off.
The
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
On
6 A
pril
201
0, th
e A
TO
sen
t an
emai
l to
tax
prac
titio
ner
s sa
yin
g:
’Not
ices
of a
sses
smen
t inc
orre
ctly
adv
isin
g re
fund
s p
aid
to b
ank
acco
unt
s
Som
e of
you
r cl
ient
s m
ay
hav
e re
cent
ly r
ecei
ved
a no
tice
of a
sses
sme
nt
wh
ich
advi
sed
thei
r re
fun
d w
as
paid
ele
ctro
nica
lly to
thei
r n
om
inat
ed
bank
ac
cou
nt in
inst
ance
s w
her
e th
ey
have
not
pro
vid
ed b
ank
acco
unt d
etai
ls.
We
have
iden
tifie
d th
e cl
ient
s af
fect
ed a
nd
will
issu
e th
eir
refu
nd v
ia
cheq
ue.
You
r cl
ient
s ca
n e
xpec
t to
rece
ive
the
ir re
fun
d ch
eque
from
12
Apr
il 20
10.’
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
The
AT
O c
omm
unic
ated
dir
ect
ly w
ith ta
x pr
actit
ion
ers
via
emai
l with
in o
ne
we
ek o
f bec
omin
g a
wa
re o
f th
e pr
oble
m. T
his
com
mun
icat
ion
wo
uld
have
he
lped
tax
pra
ctiti
oner
s to
avo
id u
nnec
essa
rily
con
tact
ing
the
AT
O u
ntil
afte
r 12
Apr
il. It
is u
nkno
wn
ho
w m
any
tax
prac
titio
ners
and
taxp
aye
rs c
alle
d th
e A
TO
bef
ore
this
com
mun
icat
ion
to fi
nd o
ut w
hat h
appe
ned.
Add
ition
ally
, th
e A
TO
did
not
up
date
its
web
site
or
othe
rwis
e pu
blic
ly a
dvis
e ta
xpay
ers.
It
is
also
unk
no
wn
how
ma
ny
of th
ese
taxp
aye
rs w
ere
se
lf-lo
dge
rs a
nd h
ad
to c
all
the
AT
O to
find
out
wh
at h
app
ene
d.
AT
O c
all c
entr
e st
aff h
ad s
crip
ting
to e
xpla
in th
e er
rors
and
res
ultin
g de
lays
. H
ow
ever
, the
se e
xpla
nat
ions
dep
ende
d o
n e
xter
nal
s in
itiat
ing
the
com
mun
icat
ion
.
197
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
cred
its w
ill t
hen
be r
e-ra
ised
whe
n fu
ture
act
ion
occu
rs o
n th
e ac
coun
t. T
his
proc
ess
is to
sto
p sm
all d
olla
r am
ount
s be
ing
rel
ease
d/is
sue
d to
tax
prac
titio
ners
whe
n th
ey
are
pos
ted
to th
e ac
coun
t. T
he is
sue
affe
cts
som
e 14
,00
0 cl
ient
s; 9
9 pe
r ce
nt a
re r
epre
sent
ed b
y ta
x pr
actit
ion
ers.
The
ave
rage
am
ount
of t
he r
efun
d to
be
paid
is $
4.
It sh
ould
als
o b
e no
ted
that
the
date
s of
the
NO
As
that
did
issu
e la
ter
we
re
not c
han
ged
to r
efle
ct th
e la
ter
date
of i
ssue
. A
lthou
gh
tax
pra
ctiti
oner
s m
ay
have
bee
n ab
le to
exp
lain
to th
eir
clie
nts
the
reas
ons
for
the
del
ay
on
the
basi
s of
the
emai
l, it
ma
y ha
ve c
ontr
ibut
ed
to a
dver
se im
pre
ssio
ns o
f the
ir re
pres
enta
tive
s.
11
No
tice
s o
f A
sse
ssm
ent
(NO
As)
issu
ed b
ut
Sta
tem
ents
of
Acc
ou
nt
(SO
As)
wit
h a
ttac
hed
ch
equ
es w
ere
can
celle
d
Und
er th
e ne
w s
yste
m, t
he A
TO
will
issu
e a
NO
A a
nd a
SO
A w
her
e a
refu
nd
is d
ue. I
f the
taxp
aye
r is
not
pai
d th
roug
h E
FT
then
a c
heq
ue
is a
ttach
ed
to
the
SO
A.
On
8 A
pril
201
0, th
e A
TO
bec
ame
aw
are
tha
t N
OA
s w
ere
issu
ed w
hic
h ad
vise
d ta
xpa
yers
that
thei
r ch
eque
wa
s at
tach
ed to
the
SO
A, h
ow
ever
, th
e IC
P s
yste
m h
ad
canc
elle
d th
e S
OA
and
ther
efor
e no
ch
equ
e w
as
issu
ed
(not
e th
at th
is d
id n
ot a
ffect
thos
e ta
xpa
yers
ele
ctin
g to
hav
e th
e re
fun
d se
nt
to th
eir
bank
acc
ount
via
EF
T).
Thi
s pr
oble
m a
ffect
ed o
ver
140,
000
taxp
aye
rs, c
ance
lling
aro
und
$56
9 m
illio
n w
orth
of r
efun
d ch
eque
s. W
hen
AT
O s
taff
acce
ssed
the
syst
em
, th
e sy
stem
s in
dica
ted
that
the
cheq
ue h
ad in
fact
bee
n se
nt. T
he A
TO
be
cam
e a
war
e th
at th
is w
as a
pro
blem
on
8 A
pril.
The
cau
se fo
r th
is p
robl
em w
as
that
the
e-fix
for
ano
ther
pro
blem
had
un
inte
nde
d co
nseq
uenc
es (
that
is, I
nfra
117
5974
to fu
lly u
pdat
e G
IC b
efo
re
issu
ing
the
refu
nd (
befo
re c
allin
g P
CB
) co
mb
ined
with
the
fix to
red
uce
the
volu
me
of m
onth
ly s
tate
men
ts s
ent t
o ag
ents
). T
his
prob
lem
cau
sed
the
AT
O
to p
ut o
n ho
ld it
s ac
coun
ting
bat
ch p
roce
sses
for
thes
e ty
pes
of ta
xpa
yers
un
til 1
6 A
pril,
with
all
bei
ng
sent
to A
ustr
alia
Pos
t by
19
Apr
il.
On
4 M
ay,
the
AT
O r
esol
ved
this
pro
blem
by
rese
tting
the
SO
A b
ack
to
‘ap
prov
ed
stat
us’ i
n th
e sy
ste
m a
nd is
sued
the
SO
As
with
che
que
s at
tach
ed.
The
AT
O a
lso
obta
ine
d le
gal
adv
ice
that
the
Inte
rest
on
Ove
rpa
ymen
ts (
IOP
) w
as
paya
ble.
The
AT
O a
dvis
es th
at it
com
ple
ted
the
paym
ent
of i
nter
est t
o th
ose
wh
o ar
e kn
ow
n to
be
ow
ed
grea
ter
than
$5
0 in
Se
ptem
ber
201
0, a
s ag
reed
thro
ugh
con
sulta
tion
with
tax
prac
titio
ners
an
d th
eir
prof
essi
ona
l bo
die
s. A
mou
nts
less
than
$5
0 ha
ve n
ot y
et b
een
post
ed
to a
ccou
nts;
the
prop
osed
cou
rse
of a
ctio
n is
to p
ost t
he c
red
its o
nto
the
acco
unts
an
d th
en
wri
te th
em o
ff. T
he c
redi
ts w
ill th
en b
e re
-rai
sed
wh
en fu
ture
act
ion
occu
rs o
n th
e ac
cou
nt. T
his
proc
ess
is to
sto
p sm
all d
olla
r am
oun
ts b
ein
g re
leas
ed/is
sue
d to
age
nts
wh
en th
ey
are
post
ed to
the
acco
unt.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
On
14 A
pril
20
10 th
e A
TO
sen
t an
emai
l to
tax
prac
titio
ners
sa
ying
:
‘Ref
und
ch
equ
e de
lays
We
have
iden
tifie
d an
err
or w
here
som
e of
you
r cl
ient
s m
ay
have
rec
eiv
ed
a no
tice
of a
sses
smen
t w
itho
ut a
cor
resp
on
din
g st
atem
ent
of a
ccou
nt o
r re
fund
ch
eque
. D
ue to
this
err
or, a
ppro
xim
atel
y 14
0,00
0 ch
equ
es w
ere
not
prin
ted.
We
are
fixin
g th
e pr
obl
em a
nd
the
che
ques
sho
uld
be
with
yo
ur c
lient
s b
y th
e en
d of
ne
xt w
eek
.’
On
15 A
pril
20
10, t
he S
eco
nd C
omm
issi
one
r pu
blis
hed
a ge
nera
l upd
ate
on
the
AT
O w
ebsi
te s
ayi
ng:
’Las
t w
eek
we
notic
ed
an in
crea
se in
cal
ls fr
om p
eopl
e w
ho
rec
eive
d a
notic
e of
ass
essm
ent a
nd w
ere
entit
led
to a
ref
und,
but
the
cheq
ue w
as
not
incl
ude
d. U
nfor
tuna
tely
, app
roxi
mat
ely
140
,000
che
ques
we
re n
ot p
rinte
d.
The
y ar
e no
w b
eing
pri
nted
and
will
be
with
Aus
tral
ia P
ost b
y M
ond
ay
19 A
pril.
’
On
20 A
pril
20
10, t
he S
eco
nd C
omm
issi
one
r pu
blis
hed
a ge
nera
l upd
ate
on
the
AT
O w
ebsi
te s
ayi
ng:
’Will
inte
rest
be
pai
d o
n ov
erd
ue r
efun
ds?
Yes
, it’s
a n
orm
al p
art o
f our
ope
ratio
ns n
o m
atte
r w
hat
the
situ
atio
n. If
we
take
mor
e th
an 3
0 da
ys a
fter
your
inco
me
tax
retu
rn is
lod
ged
to is
sue
a no
tice
of a
sses
smen
t and
that
ass
essm
ent e
ntitl
es y
ou to
a r
efun
d of
tax,
w
e w
ill p
ay in
tere
st.
Inte
rest
is p
aid
for
the
perio
d b
egin
ning
from
the
30th
da
y af
ter
the
day
on
wh
ich
we
rec
eiv
ed th
e re
turn
and
end
s o
n th
e da
y th
e n
otic
e of
as
sess
men
t is
issu
ed.
Whe
re s
uch
inte
rest
is p
aya
ble,
peo
ple
do
not
nee
d to
ask
for
it —
we
will
ca
lcul
ate
the
inte
rest
. Int
eres
t will
usu
ally
be
paid
with
the
del
aye
d re
fund
.
198
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
The
inte
rest
is p
aid
at th
e pr
esc
ribe
d ra
te w
hic
h is
cur
rent
ly 3
.95%
(1
Jan
uar
y 20
10
to 3
1 M
arch
201
0) a
nd
4.16
% (
1 A
pril
201
0 to
30
Jun
e 20
10)
.
Ho
w d
o I k
now
wh
ethe
r I a
m e
ntitl
ed
to in
tere
st o
n m
y ta
x re
fund
and
wh
en
will
it b
e pa
id?
Man
y ta
xpa
yers
wh
ose
refu
nd w
as d
ela
yed
by
our
rec
ent p
roce
ssin
g pr
oble
ms
will
be
paid
inte
rest
.
You
do
not
ne
ed
to a
pply
for
this
inte
rest
pa
ymen
t. W
e ar
e cu
rren
tly
wo
rkin
g ou
t w
ho
wa
s af
fect
ed a
nd th
e qu
icke
st, m
ost c
ost-
effic
ient
wa
y of
ca
lcul
atin
g an
d p
ayi
ng
you
the
inte
rest
.
We
deci
ded
to m
ake
the
inte
rest
pa
ymen
ts a
fter
refu
nds
issu
ed, t
o fu
rthe
r re
duce
an
y d
ela
ys in
pa
yin
g th
e bu
lk o
f the
ref
und
to ta
xpa
yers
.’
On
22 A
pril
20
10 a
t the
AT
O g
ave
evid
ence
at t
he F
eder
al P
arlia
men
t’s J
oint
C
omm
ittee
for
Pub
lic A
ccou
nts
and
Aud
it he
arin
g. T
he A
TO
sai
d:
’Mr
But
ler
— T
here
we
re 1
40,0
00 c
heq
ues
that
wer
e n
ot p
rint
ed. W
e id
ent
ified
that
Frid
ay
the
we
ek
befo
re la
st a
nd th
en w
e m
ove
d du
ring
that
pa
rtic
ula
r w
eek
, las
t w
eek
, to
und
erst
and
tha
t fu
lly.
By
Frid
ay
of la
st w
eek
w
e ha
d ch
equ
es
alre
ad
y w
ith th
e pr
inte
rs to
be
prin
ted
and
sent
to
taxp
aye
rs. B
y M
ond
ay
of th
is w
eek
the
final
bat
ch o
f tho
se c
heq
ues
wer
e w
ith th
e pr
inte
rs. S
o du
ring
this
we
ek th
ose
cheq
ues
will
go
out.
CH
AIR
— A
nd w
he
n do
es th
at e
rror
dat
e fr
om
? W
hen
wo
uld
the
first
tax
asse
ssm
ent
ha
ve g
one
out
with
out a
ref
und
incl
ude
d?
Mr
But
ler
— T
hat v
arie
d. T
here
we
re s
ome
that
wou
ld h
ave
occ
urre
d lit
eral
ly t
he d
ay
befo
re w
e fo
und
the
pro
blem
and
som
e b
ack
to la
te M
arch
. W
e ha
d a
per
iod
wh
ere
we
coul
d n
ot p
roce
ss r
etur
ns a
nd 2
2 M
arch
we
star
ted
proc
essi
ng a
gain
. The
se w
ere
not a
ll ta
xpa
yers
; the
y w
ere
just
ta
xpa
yers
in a
par
ticu
lar
situ
atio
n w
her
e th
ey
had
wh
at is
cal
led
gen
eral
in
tere
st c
harg
e o
n th
eir
acco
unt
. Oth
er r
efun
ds w
ere
abs
olu
tely
goi
ng
thro
ugh.
CH
AIR
— S
o th
e on
es th
at d
id n
ot h
ave
any
devi
atio
n fr
om a
nor
mal
re
fund
ther
e w
as n
o pr
obl
em?
Mr
But
ler
— T
hat i
s rig
ht.
CH
AIR
— B
ut y
ou
have
no
w id
entif
ied
that
it is
a s
peci
fic t
ype
of ta
xpa
yer
wh
o h
as b
een
cau
ght
up
in th
is, a
s yo
u sa
y, g
litch
. The
oth
er q
uest
ion
wa
s ho
w m
an
y ta
xpa
yers
hav
e be
en d
ela
yed
by
this
failu
re in
the
syst
em to
re
ceiv
e th
eir
retu
rn?
199
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
Mr
But
ler
— W
e do
not
se
e it
as a
failu
re in
the
syst
em. T
here
are
tw
o de
lays
. I c
an e
xpla
in. T
he fi
rst o
ne, a
s I j
ust e
xpla
ine
d, w
as
to d
o w
ith th
e 14
0,0
00 c
heq
ues
.’
On
1 Ju
ne 2
010
at S
enat
e E
stim
ates
, the
Co
mm
issi
oner
sai
d (a
mon
gst o
ther
th
ings
):
’The
re w
as
a di
p in
our
ser
vice
sta
ndar
ds u
p to
1 A
pril
201
0 m
uch
of w
hich
w
as
unav
oida
ble
. Tw
o gl
itch
es
with
the
syst
em d
ela
yed
som
e re
turn
s an
d
refu
nds
in M
arch
201
0.’
On
1 Ju
ne 2
010
at S
enat
e E
stim
ates
, the
Sec
ond
Com
mis
sion
er s
aid
(am
ongs
t oth
er th
ings
):
’As
the
com
mis
sion
er s
aid,
sin
ce 1
Apr
il w
e h
ave
met
all
of o
ur s
ervi
ce
stan
dard
s in
pro
cess
ing
retu
rns
and
as o
f the
end
of M
ay
we
had
ma
ny
few
er
retu
rns
on
han
d be
ing
scru
tinis
ed th
an
in M
ay
last
yea
r or
Ma
y th
e ye
ar b
efor
e. S
o w
e d
id h
ave
the
two
glitc
hes
that
the
com
mis
sion
er
refe
rred
to, b
ut e
ssen
tially
we
fore
sha
dow
ed
a de
lay,
had
a d
ela
y an
d ca
ught
up.
Sin
ce 1
Apr
il a
ll n
ew
ret
urns
hav
e be
en
proc
esse
d in
ac
cord
ance
with
the
serv
ice
stan
dar
ds.’
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
The
AT
O c
omm
unic
ated
dir
ect
ly w
ith ta
x pr
actit
ion
ers
via
emai
l with
in o
ne
we
ek o
f bec
omin
g a
wa
re o
f th
e pr
oble
m. T
his
com
mun
icat
ion
wo
uld
have
he
lped
tax
pra
ctiti
oner
s to
avo
id u
nnec
essa
rily
con
tact
ing
the
AT
O u
ntil
afte
r 14
Apr
il. It
is u
nkno
wn
ho
w m
any
tax
prac
titio
ners
and
taxp
aye
rs c
alle
d th
e A
TO
bef
ore
this
com
mun
icat
ion
to fi
nd o
ut w
hat h
appe
ned.
Mos
t of t
he r
e-tr
igg
ered
ref
und
s w
ere
sent
to A
ustr
alia
Pos
t on
19 A
pril.
A
dditi
ona
lly, T
he A
TO
did
not
upd
ate
its w
eb
site
or
othe
rwis
e pu
blic
ly a
dvis
e ta
xpa
yers
. It i
s al
so u
nkn
ow
n ho
w m
an
y of
thes
e ta
xpa
yers
we
re s
elf-
lod
gers
an
d h
ad to
cal
l the
AT
O to
find
out
wh
at h
app
ene
d.
AT
O c
all c
entr
e st
aff h
ad s
crip
ting
to e
xpla
in th
e er
rors
and
res
ultin
g de
lays
. H
ow
ever
, the
se e
xpla
nat
ions
dep
ende
d o
n e
xter
nal
s in
itiat
ing
the
com
mun
icat
ion
.
It sh
ould
als
o b
e no
ted
that
the
date
s of
the
NO
As
that
did
issu
e la
ter
we
re
not c
han
ged
to r
efle
ct th
e la
ter
date
of i
ssue
. A
lthou
gh
tax
pra
ctiti
oner
s m
ay
have
bee
n ab
le to
exp
lain
to th
eir
clie
nts
the
reas
ons
for
the
del
ay
on
the
basi
s of
the
emai
l, it
ma
y ha
ve c
ontr
ibut
ed
to a
dver
se im
pre
ssio
ns o
f the
ir re
pres
enta
tive
s.
200
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Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
12
Tax
able
inco
me
on
th
e N
oti
ce o
f A
sse
ss
men
t (N
OA
) in
corr
ect
ly
dis
pla
yed
a z
ero
(th
e ‘r
esu
lt o
f th
is n
oti
ce’ c
alcu
lati
on
is c
orr
ect
)
All
NO
As
prin
ted
on th
e 9
Ma
rch
201
0 di
spla
yed
a ze
ro a
s th
e ta
xab
le
inco
me.
The
AT
O id
entif
ied
this
dur
ing
its c
orre
spo
nde
nce
verif
icat
ion
proc
ess
and
bel
ieve
s th
at n
o su
ch N
OA
s w
ere
issu
ed t
o ta
xpay
ers.
The
AT
O
com
pute
r sy
stem
s re
cord
ed th
e co
rrec
t tax
able
inco
me
on th
e ac
cou
nt b
ut
the
figur
e pr
inte
d on
the
NO
A w
as w
ron
g.
The
AT
O s
topp
ed a
ll ac
coun
ting
batc
h pr
oce
sses
. Thi
s m
eant
that
no
NO
As
we
re is
sued
. Aro
und
160,
000
NO
As
wer
e af
fect
ed. T
he r
easo
ns fo
r th
e pr
oble
m s
tem
med
from
an
e-fix
app
lied
in e
arly
Mar
ch 2
010
— th
e e-
fix
app
lied
to In
fra
1179
379.
Fix
es
wer
e re
qui
red
for
alre
ad
y a
sses
sed
NO
As
as
we
ll as
thos
e in
the
proc
ess
of b
ein
g as
sess
ed (
that
is, t
hose
pro
cess
ed
by
the
ICP
sys
tem
bef
ore
2am
on
5 M
arch
but
had
not
gon
e th
roug
h th
e N
OA
ba
tch)
.
Fro
m 2
2 M
arch
, th
e A
TO
beg
an p
rogr
essi
vely
re-
proc
essi
ng a
nd is
suin
g N
OA
s. F
urth
er e
-fix
es w
ere
requ
ired
, but
by
29 M
arch
the
AT
O c
onsi
dere
d
that
nor
mal
pro
cess
ing
had
resu
med
. Ho
we
ver,
the
AT
O e
ncou
nter
ed
anot
her
pro
ble
m a
nd b
y 28
Apr
il it
had
stop
ped
aro
und
13,2
00 N
OA
s fr
om
issu
ing
to ta
xpa
yers
. The
AT
O r
elea
sed
aro
und
500
0 of
thes
e af
ter
revi
ew
an
d th
e re
mai
nin
g re
quir
ed a
not
her
data
fix
prio
r to
thei
r re
leas
e.
By
3 M
ay,
the
AT
O h
ad d
ecid
ed th
at th
e re
med
iatio
n pl
an
was
to p
ay
Inte
rest
on
Ove
rpa
yme
nts
(IO
P)
for
arou
nd
70,0
00 d
ela
yed
refu
nds.
The
AT
O
advi
ses
that
it c
ompl
eted
the
paym
ent
of i
nter
est t
o th
ose
wh
o ar
e kn
ow
n to
be
ow
ed
grea
ter
than
$5
0 in
Sep
tem
ber
20
10, a
s ag
reed
thr
ough
co
nsu
ltatio
n w
ith ta
x pr
actit
ion
ers
and
the
ir pr
ofes
sio
nal b
odie
s. A
mou
nts
less
than
$50
hav
e no
t ye
t be
en p
oste
d on
to a
ccou
nts;
the
prop
osed
cou
rse
of a
ctio
n is
to p
ost t
he c
redi
ts o
nto
the
acco
unts
and
then
writ
e th
em o
ff. T
he
cred
its w
ill t
hen
be r
e-ra
ised
whe
n fu
ture
act
ion
occu
rs o
n th
e ac
coun
t. T
his
proc
ess
is to
sto
p sm
all d
olla
r am
ount
s be
ing
rel
ease
d/is
sue
d to
age
nts
wh
en
the
y ar
e po
ste
d to
the
acco
unt
.
On
3 M
ay,
the
AT
O a
lso
iden
tifie
d th
at g
ener
ic fo
rms
cont
inue
d to
gen
erat
e N
OA
s w
ith z
ero
taxa
ble
inco
me.
The
AT
O s
ched
uled
to fi
x th
is o
n 7
May
.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
On
15 M
arch
201
0, th
e S
econ
d C
omm
issi
oner
issu
ed
a ge
nera
l upd
ate
wh
ich
incl
ude
d th
e fo
llow
ing
wo
rdin
g:
’At o
ur la
st u
pd
ate
on 2
Mar
ch 2
010,
we
we
re o
n tr
ack
to is
sue
the
rem
ain
ing
stoc
kpile
d re
fun
ds a
nd a
sses
sme
nts
for
inco
me
tax
retu
rns
lod
ged
in F
ebru
ary
by
the
en
d of
last
we
ek.
Last
wee
k w
e ex
peri
ence
d so
me
min
or p
robl
ems
wh
ich
have
del
aye
d us
is
suin
g so
me
of
thos
e re
mai
nin
g st
ockp
iled
refu
nds
and
ass
essm
ents
wh
ile
we
ensu
re th
e in
tegr
ity o
f our
dat
a …
We
have
fixe
d th
ese
min
or p
robl
ems
and
can
star
t rel
easi
ng
mos
t of t
hese
re
fund
s a
nd a
sses
smen
ts fr
om
toda
y (w
ith th
e e
xce
ptio
n of
ass
essm
ents
in
volv
ing
non-
resi
den
t w
ithho
ldin
g ta
x).’
On
29 M
arch
201
0, th
e S
econ
d C
omm
issi
oner
issu
ed
a ge
nera
l upd
ate
wh
ich
incl
ude
d th
e fo
llow
ing
wo
rdin
g:
’Wha
t has
ha
ppe
ned
ove
r th
e la
st t
wo
to th
ree
we
eks?
We
had
larg
ely
caug
ht u
p w
ith th
e ba
cklo
g of
ret
urns
by
the
end
of
Feb
ruar
y, h
ow
ever
on
9 M
arch
we
dis
cove
red
a pr
oble
m w
ith th
e da
ta in
so
me
notic
es o
f as
sess
men
t wh
ich
had
bee
n pr
inte
d bu
t not
sen
t to
taxp
aye
rs. U
nfor
tuna
tely
, th
is m
eant
we
coul
d no
t sen
d an
ythi
ng fo
r pr
intin
g an
d po
stin
g un
til w
e fix
ed
the
pro
ble
m.
It to
ok u
s lo
nge
r th
an e
xpec
ted
to fi
x th
e pr
obl
em a
nd w
e re
com
me
nced
se
ndin
g no
tice
s of
ass
essm
ent
s to
be
prin
ted
and
pos
ted
on
Mon
da
y 22
Mar
ch.’
On
22 A
pril
20
10, a
t the
Fed
era
l Par
liam
ent
’s J
oint
Com
mitt
ee fo
r P
ublic
A
ccou
nts
and
Aud
it, th
e A
TO
gav
e th
e fo
llow
ing
evid
ence
:
’Mr
But
ler
— Y
es. S
o on
9 M
arc
h w
e id
entif
ied
an is
sue
that
unf
ortu
nat
ely
did
take
us
lon
ger
than
we
thou
ght
— it
took
us
alm
ost t
wo
we
eks
to fi
x th
at
and
be
very
co
nfid
ent
that
it w
as n
ot g
oing
to o
ccur
aga
in.
CH
AIR
— W
hy
did
it ta
ke t
wo
we
eks?
Mr
But
ler
— I
t wa
s co
mp
lex.
It
was
diff
icul
t. W
e ha
d re
turn
s pa
rt w
ay
thro
ugh
the
syst
em. W
e ha
d to
bac
k th
em o
ut, p
ut th
e fix
in p
lace
and
th
orou
ghly
test
that
it w
as n
ot g
oing
to c
ause
an
y m
ore
prob
lem
s. W
e to
ld
the
com
mun
ity a
bout
that
par
ticul
ar is
sue
on 1
5 M
arch
, on
our
onl
ine
upd
ate
— th
at th
ere
was
this
pro
ble
m w
hic
h de
laye
d us
. We
resu
me
d pr
oces
sing
on
23 M
arch
…
201
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
Mr
But
ler
— W
e ha
ve b
een
qui
te o
vert
from
ear
ly M
arch
ab
out
wha
t w
e w
oul
d do
. We
actu
ally
cau
ght
up w
ith th
e pr
oces
sing
at t
he e
nd o
f F
ebru
ary.
So
we
we
re v
ery
ple
ased
, but
we
had
this
on
e pr
obl
em a
nd lo
st
two
we
eks
…
Mr
D’A
scen
zo —
To
the
exte
nt th
at w
e h
ave
no
w fo
und
ours
elve
s w
ith
una
ntic
ipat
ed e
xtra
wor
k b
eca
use
of th
e tw
o-w
eek
ext
ra d
ela
y th
at
occu
rre
d, w
e h
ave
been
put
ting
on n
ew
sta
ff to
pus
h th
at th
roug
h. A
t the
ea
rlier
po
int i
n tim
e, w
e ha
d n
ot a
ntic
ipat
ed t
he fa
ct th
at w
e w
oul
d ha
ve th
e
glitc
h th
at M
r B
utle
r ra
ised
: on
e of
our
nor
ma
l e-f
ixes
impa
cted
on
wh
at
wa
s go
ing
thro
ugh
the
syst
em. W
e ha
d to
bla
ck o
ut a
ll th
e sy
stem
s a
nd
that
add
ed a
n un
avoi
dab
le t
wo
we
eks
to w
hat
wa
s al
read
y a
pla
nned
pr
oces
s.
Ms
LEY
— W
hich
tw
o w
eek
s?
Mr
But
ler
— F
rom
9 M
arch
to 2
2 M
arch
.’
At t
he 1
Jun
e 2
010
Se
nate
Est
imat
es h
eari
ng,
the
AT
O g
ave
the
follo
win
g ev
iden
ce:
Mr
D’A
scen
zo —
… T
here
wa
s a
dip
in o
ur s
ervi
ce s
tan
dard
s up
to 1
Apr
il 20
10
muc
h of
wh
ich
wa
s un
avo
idab
le. T
wo
glitc
hes
with
the
syst
em
dela
yed
som
e re
turn
s an
d re
fund
s in
Mar
ch 2
010
…
Mr
But
ler
— A
s th
e co
mm
issi
one
r sa
id, s
ince
1 A
pril
we
have
met
all
of o
ur
serv
ice
stan
dard
s in
pro
cess
ing
retu
rns
and
as
of th
e en
d of
Ma
y w
e ha
d m
any
few
er r
etur
ns o
n h
and
bei
ng
scru
tinis
ed
than
in M
ay
last
ye
ar o
r M
ay
the
year
bef
ore
. S
o w
e d
id h
ave
the
two
glitc
hes
that
the
com
mis
sion
er
refe
rred
to, b
ut e
ssen
tially
we
fore
sha
dow
ed
a de
lay,
had
a d
ela
y an
d ca
ught
up.
Sin
ce 1
Apr
il a
ll n
ew
ret
urns
hav
e be
en
proc
esse
d in
ac
cord
ance
with
the
serv
ice
stan
dar
ds.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
The
AT
O c
omm
unic
ated
dir
ect
ly w
ith ta
x pr
actit
ion
ers
via
emai
l with
in o
ne
we
ek o
f bec
omin
g a
wa
re o
f th
e pr
oble
m. T
his
com
mun
icat
ion
wo
uld
have
he
lped
tax
pra
ctiti
oner
s to
avo
id u
nnec
essa
rily
con
tact
ing
the
AT
O u
ntil
afte
r 18
Mar
ch. I
t is
unkn
ow
n ho
w m
any
tax
prac
titio
ners
and
taxp
aye
rs c
alle
d th
e A
TO
bef
ore
this
com
mun
icat
ion
to fi
nd o
ut w
hat h
appe
ned.
As
the
AT
O c
augh
t up
on p
roce
ssin
g b
y 29
Mar
ch, i
t is
also
unk
no
wn
how
m
any
tax
prac
titio
ners
co
ntac
ted
the
AT
O d
urin
g th
e p
erio
d of
18
Mar
ch to
2
Apr
il (a
llow
ing
thre
e da
ys fo
r po
stag
e). A
ddi
tiona
lly, T
he A
TO
did
not
up
dat
e its
we
bsi
te o
r ot
herw
ise
pub
licly
adv
ise
taxp
aye
rs. I
t is
also
unk
now
n
202
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
how
ma
ny
of th
ese
taxp
aye
rs w
ere
se
lf-lo
dge
rs a
nd h
ad
to c
all t
he A
TO
to
find
out
wh
at h
app
ened
.
AT
O c
all c
entr
e st
aff h
ad s
crip
ting
to e
xpla
in th
e er
rors
and
res
ultin
g de
lays
. H
ow
ever
, the
se e
xpla
nat
ions
dep
ende
d o
n e
xter
nal
s in
itiat
ing
the
com
mun
icat
ion
.
It sh
ould
als
o b
e no
ted
that
the
date
s of
the
NO
As
that
did
issu
e la
ter
we
re
not c
han
ged
to r
efle
ct th
e la
ter
date
of i
ssue
. A
lthou
gh
tax
pra
ctiti
oner
s m
ay
have
bee
n ab
le to
exp
lain
to th
eir
clie
nts
the
reas
ons
for
the
del
ay
on
the
basi
s of
the
emai
l, it
ma
y ha
ve c
ontr
ibut
ed
to a
dver
se im
pre
ssio
ns o
f the
ir re
pres
enta
tive
s.
The
re is
als
o n
o ev
iden
ce th
at th
e A
TO
ale
rted
taxp
aye
rs o
r ta
x pr
actit
ion
ers
to th
e re
-occ
urre
nce
of th
e pr
obl
ems
on
28 A
pril
or 5
Ma
y.
13
Hig
her
Ed
uca
tio
n L
oan
Acc
ou
nts
(H
EL
A)
corr
esp
on
den
ce i
ssu
es
The
AT
O n
otifi
es th
ose
taxp
aye
rs w
ith a
Hig
her
Edu
catio
n Lo
an
Pro
gram
(H
ELP
) or
Stu
den
t Fin
anci
al S
upp
lem
ent S
chem
e (S
FS
S)
debt
of t
heir
liab
ility
on
1 Ju
ne e
ach
year
whe
re th
ere
has
bee
n ac
tivity
on
thei
r ac
coun
t in
th
e pa
st 1
5 m
ont
hs. O
n 1
Jun
e in
de
xatio
n is
app
lied
to th
e ba
lanc
e ou
tsta
ndin
g. T
he A
TO
est
imat
ed th
at a
rou
nd 1
.6 m
illio
n ta
xpa
yers
hav
e su
ch
a de
bt a
nd th
at it
wo
uld
gen
erat
e a
SO
A fo
r ar
ound
1.4
mill
ion
of th
ese
taxp
ayer
s.
Fro
m 1
4 A
pril
201
0, th
e A
TO
ide
ntifi
ed p
rob
lem
s an
d d
id n
ot is
sue
any
HE
LA
corr
esp
ond
ence
. It d
irect
ed th
is c
orre
spon
de
nce
to a
dum
my
prin
ter,
pen
ding
re
solu
tion
of th
e fo
llow
ing
issu
es.
1. ‘E
AI’
and
Fo
rms
For
ms
for
seco
nd h
alf
year
de
bts
wer
e po
stin
g to
the
wro
ng
peri
od a
nd
HE
LP
debt
s w
ere
susp
ende
d as
a r
esu
lt. T
his
resu
lted
in in
corr
ect
data
pla
ced
on
the
taxp
aye
r re
cord
, and
inco
rrec
t rep
ortin
g to
the
Dep
artm
ent o
f Edu
catio
n,
Em
plo
ymen
t and
Wor
kpla
ce R
elat
ions
. The
con
sequ
ence
s w
ere
that
an
y in
divi
dua
l inc
om
e ta
x re
turn
s an
d am
endm
ent
s pr
oces
sed
for
any
inco
me
year
bet
we
en
the
inco
me
tax
rele
ase
depl
oym
ent a
nd 1
Ju
ne w
oul
d ca
lcu
late
th
e in
corr
ect c
olle
ctib
le H
ELP
deb
t an
d ra
ise
a h
igh
er c
omp
ulso
ry r
epa
ymen
t. A
lso,
the
inco
rrec
t ind
exa
tion
calc
ulat
ed o
n 1
Jun
e w
oul
d be
app
lied.
By
28
Apr
il, t
he A
TO
sch
edul
ed a
fix
to
this
err
or fo
r 7
Ma
y. It
est
imat
ed th
at a
roun
d 50
0,0
00 n
ew
deb
ts r
ecei
ved
coul
d th
en b
e lo
ade
d, w
hic
h th
e A
TO
co
nsid
ere
d m
ust
be
don
e be
fore
1 J
une.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
No
AT
O c
omm
unic
atio
n in
an
y g
ener
al b
roa
dcas
t exp
lain
ed
to ta
xpa
yers
or
tax
prac
titio
ner
s w
hy
thes
e er
rors
we
re o
ccur
ring.
No
AT
O c
omm
unic
atio
ns o
f the
issu
e w
ere
mad
e in
AT
O-in
itiat
ed ta
rget
ed
com
mun
icat
ion
s (s
uch
as e
ma
ils, l
ette
rs o
r ou
tbou
nd
tele
pho
ne c
alls
).
The
re is
no
evid
ence
that
AT
O c
all c
entr
e st
aff
wer
e ab
le to
exp
lain
the
reas
ons
for
the
se e
rror
s if
the
se ta
xpa
yers
’ rep
rese
ntat
ives
cal
led
to a
sk w
hy
thes
e er
rors
ha
d oc
curr
ed.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
paye
rs a
nd ta
x pr
actit
ione
rs s
uffe
red
exp
ense
s in
con
tact
ing
the
AT
O to
re
solv
e th
e pr
obl
em.
203
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
2.
Inde
xatio
n
The
re w
ere
a n
umbe
r of
pro
blem
s w
ith in
dexa
tion
rela
ting
to it
s ca
lcul
atio
n,
perf
orm
anc
e, in
dexa
tion
star
t dat
es, S
OA
sel
ectio
n, H
ELP
/SF
SS
co
rres
pon
den
ce a
ddre
ss h
iera
rchi
es, i
nclu
ding
: Inf
ra 1
1811
78 —
Inco
rrec
t da
te u
sed
to c
alcu
late
inde
xatio
n an
d bo
nuse
s, r
esul
ting
in a
ccou
nts
with
a
nil b
ala
nce
to b
e re
activ
ate
d a
nd p
lace
d in
de
bt in
corr
ectly
; Inf
ra 1
1801
91
Bac
kdat
ed
bon
us c
alcu
latio
ns p
re-2
005
is in
corr
ect;
Infr
a 12
0314
1 B
onus
not
ap
plie
d in
all
<$5
00
situ
atio
ns; I
nfra
117
0412
Inde
xatio
n ro
und
ing
is n
ot
corr
ect i
n al
l ca
ses;
Infr
a 11
7043
6 In
de
xatio
n r
emov
ing
smal
l cre
dits
; Inf
ra
118
9197
HE
LP/S
FS
S c
orre
spon
den
ce u
ses
inco
rrec
t ad
dre
ss h
iera
rch
y;
Infr
a 12
1498
3 In
crea
se ‘P
&I b
atch
’ to
20 th
read
s; In
fra
121
501
3 C
hang
e P
&I
ind
exa
tion
sele
ctio
n to
just
the
2.4
M s
elec
t clie
nts;
Infr
a 22
216
8 S
OA
trig
ger
in
Pos
t Tra
nsac
tion;
Infr
a 11
811
78
Ch
ang
e In
dexa
tion
— d
oes
not c
alcu
late
fr
om th
e be
gin
nin
g of
the
acco
unt o
n co
nver
ted
reco
rds.
The
AT
O a
dvis
es
that
thes
e pr
ob
lem
s ha
d no
impa
ct o
n ta
x ag
ents
or
taxp
aye
rs.
The
AT
O p
lann
ed to
de
plo
y fix
es fo
r th
ese
prob
lem
s ov
er th
e 25
Apr
il to
12
Ma
y pe
riod
.
3. B
onus
pa
ymen
ts
Bon
us p
aym
en
ts w
ere
not b
eing
ap
plie
d u
nder
cer
tain
co
nditi
ons:
Infr
a 11
908
15 B
onu
s no
t app
lied
on
part
ial p
aym
ents
/tran
sfer
in to
HE
LP
acco
unt
s; 1
193
036
Bo
nus
not
app
lied
wh
en tw
o pa
ymen
ts to
diff
eren
t ac
coun
ts o
ccur
on
the
sam
e da
y.
As
at 3
Ma
y, th
e A
TO
was
bu
ildin
g a
fix to
on
e of
thes
e pr
ob
lem
s an
d ha
d co
mpl
eted
the
fix fo
r th
e ot
her.
4. In
divi
dua
l in
com
e ta
x re
turn
form
pro
cess
ing
On
3 M
ay
201
0, th
e A
TO
iden
tifie
d pr
oble
ms
with
a n
umb
er
of th
ese
asse
ssm
ent
s th
at w
ere
proc
ess
ed w
ith in
corr
ect c
alcu
latio
ns
for
HE
LP/S
FS
S.
Not
ices
we
re n
ot b
ein
g di
rect
ed to
the
dum
my
prin
ter
as th
ey
wer
e no
t HE
LA
spec
ific.
The
AT
O in
tend
ed to
iden
tify
the
impa
cted
taxp
aye
rs a
nd r
e-is
sue
th
e co
rrec
t cal
cula
tions
. Ho
we
ver,
this
dep
en
ded
on
reso
lvin
g m
ultip
le In
fra
s,
wh
ich
the
AT
O h
ad s
che
dule
d fo
r 18
Ma
y.
5. O
ther
issu
es
The
mon
thly
Gen
eral
Inte
rest
Cha
rge
(GIC
) ru
n w
as tr
igge
ring
inde
xatio
n a
nd
prod
uctio
n of
the
End
of Y
ear
SO
A fo
r H
ELP
and
SF
SS
clie
nts
ever
y m
onth
. H
ow
ever
, ind
exa
tion
wa
s on
ly to
be
trig
gere
d an
nua
lly o
n 1
Jun
e. T
he A
TO
w
as
seek
ing
to im
plem
ent
a fi
x b
efor
e th
e fir
st G
IC m
onth
ly r
un.
204
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
14
Pro
ble
ms
wit
h C
hild
Su
pp
ort
Ag
enc
y (C
SA
) d
ata
exc
ha
ng
e
Exc
han
ge o
f dat
a be
twe
en th
e A
TO
and
the
CS
A is
a m
ulti-
step
pro
cess
.
One
of t
he m
ain
aim
s of
the
dat
a e
xcha
nge
is to
ena
ble
the
sha
ring
of
acco
unt
info
rmat
ion
for
the
pu
rpos
es o
f offs
etti
ng d
ebts
bet
we
en
the
AT
O
and
CS
A a
nd p
rovi
ding
inco
me
deta
ils fo
r ch
ild s
uppo
rt p
urp
oses
. The
re a
re
inb
oun
d an
d o
utbo
und
dat
a p
roce
ssin
g co
mpo
nen
ts th
at s
upp
ort t
hese
pr
oces
ses.
Gen
era
lly th
ese
are
: the
file
that
the
CS
A p
rovi
des
to th
e A
TO
in
dica
ting
clie
nts
of i
nter
est (
the
Clie
nt o
f Int
eres
t F
ile);
the
file
that
the
AT
O
send
s to
the
CS
A in
dica
ting
that
a c
lient
of i
nter
est h
as a
ref
und
(it s
houl
d be
no
ted
that
the
AT
O h
olds
the
se c
lient
s’ r
etur
ns u
ntil
it re
ceiv
es a
res
pons
e fr
om th
e C
SA
in r
elat
ion
to th
ese
clie
nts)
; the
file
that
the
CS
A s
ends
to th
e A
TO
sta
ting
that
the
CS
A w
oul
d lik
e to
det
erm
ine
wh
ethe
r so
me
of th
e re
fund
co
uld
be g
arni
shed
; the
file
that
the
AT
O s
ends
to th
e C
SA
set
ting
out t
he
clie
nts’
ref
unds
gar
nish
ed a
nd th
e re
leva
nt a
mou
nts
(rec
on
cilia
tion
file)
; the
fil
e th
at th
e A
TO
sen
ds th
e C
SA
set
ting
out t
he in
com
e of
the
clie
nts
of
inte
rest
.
Sin
ce 2
5 Ja
nu
ary
201
0, th
e A
TO
and
CS
A e
xper
ienc
ed
pro
blem
s.
Clie
nts
of In
tere
st
Und
er th
e A
TO
’s p
re-e
xist
ing
syst
ems,
the
CS
A u
plo
adin
g o
f th
is fi
le w
as
larg
ely
auto
ma
ted
and
wa
s us
ually
com
plet
ed
over
nig
ht. H
ow
eve
r, u
nde
r th
e ne
w s
yste
ms,
the
CS
A e
xper
ienc
ed
pro
blem
s in
cor
rect
ly lo
adin
g re
cord
s on
to th
eir
syst
em
bec
ause
of f
orm
attin
g er
rors
in th
e in
com
e ta
x re
turn
tr
ansa
ctio
ns s
ent
to th
e C
SA
. Som
e re
cord
s al
so w
ent
mis
sing
in th
e tr
ans
fer
of d
ata.
As
a re
sult
of th
ese
prob
lem
s, th
e C
SA
had
to m
anua
lly in
put
thes
e re
cord
s o
nto
its s
yste
m —
on
ave
rag
e 40
0 p
er w
eek
(co
mp
ared
with
five
per
m
onth
un
der
the
AT
O’s
pre
-exi
stin
g sy
stem
s). A
lso,
due
to th
e su
bsta
ntia
l in
cre
ase
in A
TO
man
ually
pro
cess
ed r
etur
ns (
unde
r its
pos
t-de
plo
yme
nt
miti
gatio
n st
rate
gy
of m
anu
ally
pro
cess
ing
prio
rity
retu
rns)
this
sub
sta
ntia
lly
incr
eas
ed th
e am
ount
of m
anua
l wo
rk r
equ
ired
by
the
CS
A.
Thi
s w
ork
hel
d
up a
ppr
oxi
mat
ely
20,0
00 in
com
e ta
x-re
late
d re
fund
s a
nd 7
000
BA
S r
efun
ds.
T
he C
SA
est
imat
es th
at, a
t its
pea
k, th
is m
anua
l pro
cess
ad
ded
3–4
we
eks
to th
e pr
oces
sing
of t
heir
clie
nts
’ tax
ret
urns
. T
he C
SA
est
imat
ed th
at it
re
quire
d 1
2 e
xtra
sta
ff to
man
ually
rem
edy
thes
e pr
obl
ems.
Inco
min
g C
SA
dat
a
The
AT
O a
lso
expe
rien
ced
a nu
mb
er o
f pro
ble
ms
in it
s co
mpu
ter
syst
ems
with
inco
min
g C
SA
dat
a, m
eani
ng
that
the
AT
O m
ay n
ot b
e p
rovi
din
g so
me
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
At t
he 1
0 F
ebru
ary
2010
Se
nat
e E
stim
ates
hea
ring
, the
AT
O g
ave
the
follo
win
g ev
ide
nce:
’Mr
But
ler
— W
e w
ill h
ave
cau
ght u
p a
nd b
e pr
oces
sing
ret
urns
on
a no
rmal
bas
is.
Sen
ator
BU
SH
BY
— B
y th
e e
nd o
f Feb
ruar
y?
Mr
But
ler
— B
y th
e en
d of
Feb
ruar
y. T
here
mig
ht b
e so
me
retu
rns
for
wh
ich,
for
part
icul
ar r
eas
ons,
ass
essm
ent
s ar
e no
t iss
ued.
The
re c
ould
be
a
child
sup
port
issu
e, a
Ce
ntre
link
issu
e or
so
met
hin
g w
e ar
e co
ncer
ned
abo
ut —
a h
igh
-ris
k re
fund
, as
we
call
it. A
part
from
thos
e, w
hich
are
re
lativ
ely
smal
lish
in n
umbe
r, th
e va
st m
ajor
ity w
ill g
o th
roug
h b
y th
e en
d of
th
e m
onth
.’
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
pra
ctiti
one
rs a
nd ta
xpa
yers
wh
o m
ade
repe
ated
ca
lls w
ere
told
that
the
mat
ter
had
bee
n es
cala
ted.
Cal
lers
we
re n
ot g
ive
n a
time
perio
d fo
r co
mpl
etio
n w
hic
h w
as
kept
.
Affe
cted
taxp
aye
rs e
xpec
ting
a re
fund
we
re f
orce
d to
wa
it lo
nger
tha
n an
ticip
ate
d fo
r th
eir
refu
nd,
so
met
imes
man
y m
onth
s.
Som
e 30
0–40
0 C
SA
clie
nts
rece
ive
d le
ss th
an
the
y w
ere
oth
erw
ise
entit
led,
ha
ving
soc
ial i
mpa
cts
on b
oth
the
cust
odia
l par
ent
, pa
yin
g pa
rent
and
ch
ildre
n.
205
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
CS
A c
ases
en
oug
h or
all
of th
e cr
edit
to p
ay
off s
ome
or a
ll of
thei
r C
SA
deb
t. T
he C
SA
est
imat
ed th
at th
e A
TO
rel
ease
d 3
00–
400
refu
nds
wh
ich
shou
ld
have
bee
n ga
rnis
hed
. The
CS
A m
ust n
ow
com
pens
ate
the
CS
A c
lient
an
d re
cove
r th
is c
ost.
Fro
m 1
5 M
arch
the
AT
O s
yste
m w
as c
apa
ble
of p
roce
ssin
g al
l in
boun
d da
ta
from
CS
A. H
owe
ver,
it w
as
una
ble
to a
ctio
n of
fset
s be
twe
en
AT
O a
nd C
SA
, re
sulti
ng in
the
hold
ing
of r
efu
nds
wh
ere
a p
oten
tial o
ffset
exi
ste
d.
Afte
r di
scus
sio
ns w
ith th
e C
SA
, the
AT
O im
plem
ente
d a
twic
e w
eek
ly
exch
ang
e of
dat
a (a
dai
ly p
roce
ss n
ot a
chie
vabl
e gi
ven
the
man
ual
inte
rve
ntio
n re
quir
ed fo
r ou
tsta
ndin
g sy
stem
s is
sues
) an
d ru
n its
ref
und
er (
a pr
e-e
xist
ing
leg
acy
syst
em)
an
d P
roce
ss C
redi
t Bal
anc
e (P
CB
) sy
stem
s ev
ery
day.
Tax
Tim
e 10
pro
blem
s
Als
o, a
s a
resu
lt of
ne
w d
ata
field
s in
sert
ed in
the
Tax
Tim
e10
chan
ges,
the
A
TO
and
CS
A s
yste
ms
‘did
not
talk
to e
ach
othe
r’. T
his
mea
nt th
at
post
-ass
essm
ent
taxa
ble
inco
me
data
was
not
bei
ng
rece
ived
by
the
CS
A in
re
al ti
me.
Thi
s af
fect
ed th
e pr
oces
sing
of C
SA
ass
essm
ents
for
som
e of
its
clie
nts.
The
CS
A c
onsi
der
ed
that
bec
ause
of
the
risk
of in
corr
ect C
SA
as
sess
me
nt it
nee
ded
to m
anua
lly r
efre
sh th
e ta
xabl
e in
com
e da
ta fo
r al
l of
its c
lient
s. T
his
prob
lem
was
sch
edul
ed
to b
e fi
xed
in S
epte
mbe
r 20
10.
Rec
onc
iliat
ion
data
The
CS
A a
lso
expe
rien
ced
prob
lem
s w
ith r
eco
ncili
ng
the
gar
nish
ee d
ata
from
th
e A
TO
. The
AT
O h
ad g
arni
shed
mo
ney
from
the
payi
ng p
are
nt’s
inco
me
tax
refu
nd, b
ut t
he c
usto
dial
par
ent d
id n
ot r
ece
ive
that
mon
ey
as th
e C
SA
w
as
unab
le to
iden
tify
the
taxp
aye
r co
ncer
ned.
Thi
s pr
oble
m in
volv
es a
roun
d $2
mill
ion
of g
arn
ish
ed a
mo
unts
and
ave
rage
d ar
ound
10
CS
A c
ompl
ain
ts a
w
eek
, w
ith s
om
e in
volv
ing
thre
ats
of v
iole
nce.
The
AT
O a
dvis
ed th
at it
co
uld
impl
emen
t a fi
x w
hic
h w
oul
d re
solv
e ar
ound
hal
f of t
he c
ase
s.
Poi
nt in
tim
e fig
ures
On
7 A
pril,
ap
pro
xim
atel
y 24
,000
ref
unds
wer
e he
ld (
toge
the
r w
ith C
entr
elin
k he
ld r
efun
ds. T
he A
TO
est
imat
ed th
at it
hel
d ar
ound
$25
mill
ion
in r
efun
ds a
t th
is s
tage
, w
ith a
roun
d $6
.5 m
illio
n of
this
am
ount
wa
itin
g m
ore
than
sev
en
days
for
the
CS
A/C
entr
elin
k of
fset
ting
to o
ccur
(in
cre
asin
g to
$7.
8 m
illio
n as
at
19
Apr
il),
with
14,
000
exp
ect
ed to
be
rele
ased
afte
r a
succ
essf
ul fi
x an
d th
e re
mai
nder
to b
e pi
cked
up
in a
we
ekly
‘ba
tch
harn
ess’
.
206
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mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
A
s at
13
Apr
il 2
010,
aro
und
15,5
00 c
ases
invo
lvin
g ar
oun
d $3
0 m
illio
n of
re
fund
s w
ere
hel
d, c
ompr
isin
g th
e fo
llow
ing:
Rea
dy
for
AT
O to
sen
d to
CS
A to
req
uest
whe
ther
offs
ettin
g sh
ould
occ
ur:
214
case
s, to
talli
ng
refu
nds
of $
491,
000
Aw
aiti
ng C
SA
adv
ice
whe
ther
offs
ettin
g sh
ould
occ
ur:
899
4 to
talli
ng $
23,7
59,
000
Adv
ice
rece
ived
fro
m C
SA
that
offs
ettin
g sh
ould
occ
ur n
ot y
et p
roce
sse
d:
617
7 ca
ses
requ
estin
g $
5,78
9,00
0 of
fset
s
As
at 2
3 A
pril,
the
AT
O w
as h
oldi
ng a
rou
nd $
16.6
mill
ion
in r
efun
ds p
end
ing
the
CS
A’s
offs
ettin
g. A
rou
nd $
6 m
illio
n of
this
am
ount
was
del
aye
d du
e to
kn
ow
n is
sues
, w
ith th
e re
st p
rogr
essi
ng th
roug
h as
‘bus
ine
ss a
s us
ual’.
As
at
28 A
pril
this
am
ount
incr
ease
d to
hol
ding
aro
und
$20.
7 m
illio
n in
ref
und
s pe
ndi
ng
the
CS
A’s
offs
ettin
g. A
roun
d $
7.6
mill
ion
of th
is a
mou
nt w
as d
ela
yed
due
to k
no
wn
issu
es (
see
bel
ow
), w
ith th
e re
st p
rogr
essi
ng t
hrou
gh
as
‘bus
ines
s as
usu
al’.
As
at 3
Ma
y, th
is a
mou
nt th
e A
TO
wa
s ho
ldin
g in
cre
ased
ag
ain
to a
roun
d $2
4.3
mill
ion
in r
efun
ds p
en
din
g th
e C
SA
’s o
ffset
ting.
H
ow
ever
, onl
y ar
ound
$0.
5 m
illio
n of
this
am
ount
was
del
aye
d du
e to
kno
wn
issu
es (
see
belo
w),
with
the
rest
pro
gres
sing
thr
oug
h as
‘bu
sine
ss a
s us
ual’.
The
follo
win
g sp
ecifi
c ac
tion
was
take
n.
INB
OU
ND
PR
OC
ES
SIN
G
1. C
lient
of
Inte
rest
Inp
ut f
ile
As
at 2
3 A
pril,
this
file
wa
s be
ing
proc
esse
d da
ily. H
ow
ever
, b
y 28
Apr
il th
is
wa
s be
ing
proc
esse
d tr
i-w
eek
ly.
OU
TB
OU
ND
PR
OC
ES
SIN
G
2. A
ccou
ntin
g B
atch
Har
nes
s w
orka
roun
d
Fro
m 1
4 A
pril,
the
AT
O r
esol
ved
furt
her
pro
blem
s so
that
it c
ould
op
erat
e its
ga
rnis
hee
batc
h ev
ery
day
an
d ha
nde
d it
over
to th
e IC
P A
ccou
ntin
g O
ps
area
— 2
0 p
er c
ent o
f cas
es p
icke
d u
p b
y ‘b
usi
ness
as
usua
l’ pr
oces
sin
g a
nd
the
rem
aini
ng
pick
ed
up b
y th
e ‘w
eek
ly A
cco
untin
g B
atch
Har
ness
W
orka
rou
nd’ (
wh
ich
dela
yed
thes
e re
turn
s b
y u
p to
one
we
ek).
The
AT
O
deci
ded
to c
ont
inu
e w
ith th
is w
orka
roun
d be
caus
e im
plem
entin
g a
perm
ane
nt
fix fo
r th
e pr
obl
em w
as
too
risky
bef
ore
Tax
Tim
e 10
had
fin
ishe
d. H
ow
eve
r,
as a
t 19
Apr
il th
is d
aily
bat
ch w
as
still
not
run
as
the
AT
O w
as
aw
aiti
ng
conf
irmat
ion
from
the
CS
A th
at a
par
ticul
ar fi
x w
as
succ
essf
ul.
207
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mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
F
rom
23
Apr
il th
is w
orka
rou
nd w
as p
roce
sse
d w
eek
ly. T
he o
ldes
t bac
klog
at
any
give
n tim
e w
as
five
days
wh
ich
wa
s th
en
clea
red
wh
en th
e w
eek
ly
Acc
ount
ing
Bat
ch H
arn
ess
wa
s ru
n. T
he A
TO
pla
nned
a p
erm
anen
t fix
for
the
Aug
ust/S
ept
em
ber
rele
ase
upd
ate
and
a m
ediu
m-t
erm
fix
to b
e de
plo
yed
be
fore
the
Tax
Tim
e10
code
free
ze.
3. C
SA
’TR
IPS
’ File
As
at 2
3 A
pril,
this
file
wa
s be
ing
proc
esse
d da
ily. H
ow
ever
, b
y 28
Apr
il th
is
wa
s be
ing
proc
esse
d tr
i-w
eek
ly.
4. ‘P
AR
V L
egac
y’ f
ile
As
at 2
3 A
pril,
this
file
wa
s be
ing
proc
esse
d da
ily. H
ow
ever
, b
y 28
Apr
il th
is
wa
s be
ing
proc
esse
d tr
i-w
eek
ly. D
edu
ctio
n re
cord
s ge
nera
ted
by
PA
RV
co
ntai
ned
inco
rrec
t ye
ar o
f ass
essm
ent v
alu
es. T
his
mea
nt th
at th
e ye
ar o
f as
sess
me
nt w
as p
opul
ated
inco
rrec
tly fo
r a
men
ded
inco
me
tax
retu
rns
and
so
me
Bus
ines
s A
ctiv
ity S
tate
men
t ass
essm
ents
. Thi
s ca
used
a la
rge
ma
nua
l w
ork
load
for
CS
A, a
s th
ey
coul
d n
ot r
econ
cile
thei
r sy
stem
s. T
he A
TO
pl
ann
ed
to h
ave
a pe
rma
nent
fix
to th
is p
robl
em in
the
Au
gust
/Sep
tem
ber
rele
ase
upda
te.
15
Pro
ble
ms
wit
h C
entr
elin
k in
form
atio
n d
ata
exch
ang
e
Exc
han
ge o
f dat
a be
twe
en th
e A
TO
and
Cen
trel
ink
is a
mu
lti-s
tep
proc
ess.
T
he u
ltim
ate
aim
of
whi
ch is
to e
nabl
e th
e sh
arin
g of
acc
oun
t inf
orm
atio
n fo
r th
e pu
rpos
es o
f ei
ther
ref
lect
ing
appr
opr
iate
cre
dits
or
offs
etti
ng d
ebts
be
twe
en th
e A
TO
and
Cen
tre
link.
The
re a
re a
num
ber
of i
nbo
und
and
ou
tbo
und
data
pro
cess
ing
com
pon
ents
that
sup
por
t thi
s pr
oces
s. It
sho
uld
be
note
d th
at in
rel
atio
n to
Fam
ily A
ssis
tanc
e O
ffice
pay
men
ts,
Cen
trel
ink
pays
be
nef
its b
ase
d on
est
imat
ed
inco
me
wh
ich
is la
ter
reco
ncile
d w
ith th
e in
com
e da
ta r
epor
ted
to th
e A
TO
. Ben
efit
entit
lem
ents
are
rec
onci
led
at th
e tim
e of
as
sess
ing
the
tax
retu
rn.
The
pro
blem
s ge
ner
ally
rel
ate
to th
e sh
arin
g of
info
rmat
ion
and
the
garn
ishi
ng o
f Cen
trel
ink
debt
s.
Fro
m 2
5 F
ebru
ary
201
0, th
e A
TO
sto
ckpi
led
850,
000
ver
ifie
d in
com
e tr
ansa
ctio
ns (
Not
e: o
ne c
lient
can
hav
e m
ultip
le tr
ansa
ctio
ns)
bec
ause
of
conc
erns
(in
clu
din
g th
at a
nu
mbe
r of
inco
me
field
s h
ad n
ot b
een
pop
ulat
ed)
th
at w
oul
d ca
use
Cen
tre
link
to is
sue
wro
ng p
aym
ent
s to
clie
nts
affe
cted
by
the
issu
e. It
sho
uld
also
be
note
d th
at th
ese
figur
es a
re a
t a p
oint
in ti
me
and
do n
ot r
epre
sent
ong
oing
sto
ckpi
les.
Sim
ilarly
, a
liabi
lity
will
be
rais
ed if
the
ba
se p
aym
ent
est
imat
e is
too
hig
h. N
otw
ithst
and
ing
this
sto
ckpi
ling
of
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
At t
he 1
0 F
ebru
ary
2010
Se
nat
e E
stim
ates
hea
ring
, the
AT
O g
ave
the
follo
win
g ev
ide
nce:
’M
r B
utle
r —
We
will
hav
e ca
ugh
t up
and
be
proc
essi
ng r
etur
ns o
n a
norm
al b
asis
. S
enat
or B
US
HB
Y —
By
the
end
of F
ebru
ary?
M
r B
utle
r —
By
the
end
of F
ebru
ary.
The
re m
ight
be
som
e re
turn
s fo
r w
hic
h, fo
r pa
rtic
ular
re
ason
s, a
sses
sme
nts
are
not i
ssue
d. T
here
cou
ld b
e
a ch
ild s
uppo
rt is
sue,
a C
ent
relin
k is
sue
or s
om
ethi
ng
we
are
conc
erne
d ab
out
— a
hig
h-r
isk
refu
nd, a
s w
e ca
ll it.
Apa
rt fr
om th
ose,
whi
ch a
re
rela
tivel
y sm
allis
h in
num
ber,
the
vast
maj
ority
will
go
thro
ugh
by
the
end
of
the
mon
th.
Sen
ator
BU
SH
BY
— In
res
pect
of t
he b
ackl
og,
doe
s th
e ta
x of
fice
info
rm
othe
r ag
enci
es o
f gov
ernm
ent
abo
ut th
e d
ela
ys it
is e
xper
ienc
ing?
For
in
stan
ce, i
s C
ent
relin
k in
form
ed s
o th
at p
eo
ple
wh
o ar
e w
aiti
ng fo
r th
eir
200
9 ta
x re
turn
s in
ord
er to
cla
im b
ene
fits
and
thos
e so
rts
of
thin
gs a
re n
ot
disa
dvan
tage
d?
Mr
But
ler
— W
e ha
ve e
ngag
ed
with
Ce
ntre
link
for
som
e tim
e. T
hey
are
fully
aw
are
of a
ll th
e tim
e fr
ames
and
thin
gs li
ke th
at.
208
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Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
tran
sact
ions
, the
AT
O c
ontin
ued
to p
roce
ss t
he a
ffect
ed ta
xpa
yers
’ ret
urns
(g
ener
ally
afte
r th
ree
days
) a
nd
the
affe
cted
taxp
aye
rs’ b
ase
Cen
trel
ink
paym
ent
s w
ere
stil
l mad
e. H
ow
eve
r, a
s C
ent
relin
k co
uld
not
verif
y th
e in
com
e re
port
ed
to th
e A
TO
, it c
ould
not
ass
ure
itse
lf w
het
he
r pa
ymen
ts w
ere
co
rrec
t. T
hese
pro
ble
ms
(an
d ot
hers
enc
ount
ered
as
the
AT
O s
tart
ed to
tr
ansf
er t
his
data
to
Cen
trel
ink)
wer
e fin
ally
re
solv
ed
to a
n e
xten
t w
hic
h al
low
ed
the
AT
O to
tran
sfer
det
ails
for
all t
hese
clie
nts
by
7 A
pril,
with
all
back
log
cle
are
d b
y 19
Apr
il. D
urin
g th
is p
erio
d, th
ere
wer
e an
unk
now
n
num
ber
of m
isse
d op
port
uni
ties
to o
ffset
ref
unds
aga
inst
deb
ts. T
he A
TO
al
so m
isse
d op
port
uniti
es to
top
up F
amily
Ass
ista
nce
Offi
ce e
ntitl
emen
ts.
Inco
rrec
t lod
gem
ent d
ates
for
inco
me
tax
retu
rns
(suc
h as
tho
se c
aus
ed
by
prob
lem
s de
scrib
ed
abov
e) a
lso
affe
cted
clie
nts’
ent
itlem
ents
to to
p up
pa
ymen
ts.
Sin
ce 1
Mar
ch, t
he A
TO
als
o ex
peri
ence
d a
5 to
6 p
er c
ent
susp
ens
e ra
te f
or
its m
utua
l clie
nt
regi
ster
form
s —
req
uiri
ng in
terv
entio
n.
The
AT
O a
lso
stoc
kpile
d re
turn
s w
hic
h co
uld
pot
entia
lly o
ffset
a C
entr
elin
k de
bt u
ntil
a st
rate
gy
was
impl
emen
ted
from
29
Mar
ch to
ru
n G
arni
shee
Bat
ch
Job
proc
esse
s da
ily th
roug
h re
fund
er (
a pr
e-ex
istin
g le
gac
y sy
stem
) w
ith a
bu
sine
ss c
hec
k ou
tput
on
the
ICP
sys
tem
. By
12
Apr
il a
ll is
sues
pre
vent
ing
the
Gar
nish
ee B
atch
Job
to b
e ru
n da
ily w
ere
eith
er r
esol
ved
or a
w
ork
aro
und
appl
ied.
Tog
ethe
r w
ith C
SA
hel
d r
efun
ds, t
he A
TO
est
imat
ed it
he
ld a
rou
nd $
25
mill
ion
in r
efu
nds
at th
is s
tag
e, w
ith a
rou
nd $
6.5m
illio
n of
th
is a
mou
nt w
aiti
ng m
ore
than
sev
en d
ays
for
the
CS
A/C
entr
elin
k of
fset
ting
to o
ccur
(in
cre
asin
g to
$7.
8 m
illio
n as
at 1
9 A
pril)
.
As
at 1
3 A
pril
201
0, th
e n
umb
ers
in r
elat
ion
to C
entr
elin
k co
mpr
ised
:
Rea
dy
for
AT
O to
sen
d to
Cen
trel
ink
to r
eque
st w
het
her
offs
ettin
g sh
oul
d oc
cur:
12
43 c
ases
tota
llin
g $
2,12
6,0
00
Aw
aiti
ng C
ent
relin
k ad
vice
on
wh
ethe
r of
fset
ting
sho
uld
occu
r: N
il
Adv
ice
rece
ive
d fr
om C
entr
elin
k th
at o
ffset
ting
shou
ld o
ccur
: 270
cas
es —
ze
ro o
ffset
ting
requ
ired
As
at 2
3 an
d 2
8 A
pril,
the
AT
O w
as h
old
ing
arou
nd $
2 m
illio
n in
ref
und
s pe
ndi
ng
Ce
ntre
link’
s of
fset
ting.
Aro
und
$1.6
mill
ion
of th
is a
mou
nt w
as
dela
yed
due
to k
now
n is
sues
(se
e be
low
), w
ith th
e re
st p
rog
ress
ing
thro
ugh
as ‘b
usin
ess
as
usua
l’.
Sen
ator
BU
SH
BY
— W
ould
the
y be
aw
are
of i
ndiv
idu
al ta
xpa
yers
wh
o m
ight
be
affe
cted
an
d th
e po
tent
ial i
mpa
ct o
n th
eir
cla
ims
thro
ugh
C
entr
elin
k?
Mr
But
ler
— S
ome
of o
ur m
atch
ing
cap
abili
ties
have
not
be
en a
vaila
ble
sinc
e th
e lo
ng
we
eken
d sh
utd
ow
n, a
nd
Ce
ntre
link
are
we
ll a
wa
re o
f tha
t. T
he w
ay
it es
sent
ially
wor
ks is
that
we
do
mat
chin
g fo
r th
em. T
hey
let
us
kno
w w
ho
the
y ar
e co
ncer
ned
abo
ut a
nd w
e w
ill le
t the
m k
no
w if
the
tax
retu
rn h
as b
een
proc
esse
d or
not
. The
y h
ave
bee
n fu
lly e
nga
ged
the
wh
ole
wa
y th
rou
gh.’
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
pra
ctiti
one
rs a
nd ta
xpa
yers
wh
o m
ade
repe
ated
ca
lls w
ere
told
that
the
mat
ter
had
bee
n es
cala
ted.
Cal
lers
we
re n
ot g
ive
n a
time
perio
d fo
r co
mpl
etio
n w
hic
h w
as
kept
.
Aro
und
7200
Cen
trel
ink
clie
nts
rece
ive
d an
inco
rrec
t Ce
ntre
link
asse
ssm
ent.
Cen
tre
link
clie
nts
dela
yed
in r
ecei
ving
thei
r e
ntitl
eme
nts.
Aro
und
11,5
00 s
uch
clie
nts
calle
d C
entr
elin
k to
ma
nua
lly c
orre
ct th
eir
form
s. C
ent
relin
k es
timat
es
a ba
cklo
g of
aro
und
750,
000
tran
sact
ions
(n
ote
that
a c
lient
ma
y h
ave
mul
tiple
tran
sact
ions
).
Tax
paye
rs e
xpec
ting
a re
fund
wer
e fo
rced
to w
ait
lon
ger
tha
n an
ticip
ate
d fo
r th
eir
refu
nd.
209
Review into the Australian Taxation Office's Change Program
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mb
er o
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rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
G
arni
shin
g ta
x re
fund
s fo
r C
ent
relin
k de
bts
Due
to p
robl
em
s w
ith th
e da
ta fl
ow
s be
twe
en
age
ncie
s, th
e A
TO
del
aye
d un
til a
fter
30 M
arch
20
10 p
roce
ssin
g of
gar
nis
hee
actio
n fo
r ar
oun
d 20
00
Cen
tre
link
deb
tors
. Pro
blem
s w
ere
als
o en
coun
tere
d, u
ntil
June
201
0, in
re
conc
iling
am
ount
s ga
rnis
hed
and
rem
itted
to
Cen
trel
ink.
The
AT
O’s
man
ual
proc
essi
ng o
f a n
umbe
r of
ret
urn
s al
so d
ela
yed
the
reco
ncili
atio
n an
d re
mis
sio
n of
am
ount
s to
Cen
trel
ink
Spe
cific
pro
ble
ms
are
outli
ned
belo
w.
INB
OU
ND
PR
OC
ES
SIN
G
1. In
com
e V
erifi
catio
n R
eque
st
As
at 2
3 A
pril
201
0, th
is r
eque
st w
as p
roce
ssed
on
an
ad h
oc
basi
s. D
aily
pr
oces
sing
of
Cen
tre
link-
initi
ated
inco
me
verif
icat
ion
requ
est
s ce
ased
on
19
Apr
il d
ue to
issu
es w
ith th
e re
spon
se fi
le (
see
belo
w).
A m
anua
l wor
karo
und
w
as
impl
eme
nted
from
21
Apr
il to
cle
ar a
bac
klog
of 1
094
tran
sact
ions
. The
A
TO
inte
nde
d to
com
men
ce d
aily
pro
cess
ing
onc
e th
e b
ackl
og h
ad
been
cl
eare
d b
y us
ing
a w
orka
roun
d. H
ow
ever
, on
22
Apr
il, th
e A
TO
sto
pped
pr
oces
sing
the
se r
equ
ests
be
caus
e C
entr
elin
k re
ject
ed
the
opt
ion
of a
m
anu
al in
terv
ent
ion.
Thi
s re
quire
d th
e A
TO
to r
esol
ve th
e sy
stem
s pr
obl
em
. T
he A
TO
had
a b
ackl
og o
f aro
und
1600
tran
sact
ions
, w
ith a
rou
nd 1
00
rece
ived
eac
h da
y. T
he A
TO
inte
nded
to r
ecom
men
ce d
aily
pro
cess
ing
on
ce
it re
solv
ed
the
prob
lem
.
2. M
utua
l Clie
nt
Reg
iste
r (M
CR
)
Fro
m 2
3 A
pril
201
0, th
is r
egis
ter
was
pro
cess
ed d
aily
. Ho
wev
er, a
rou
nd 7
per
ce
nt o
f the
MC
R fo
rms
wer
e su
spe
ndin
g as
the
MC
R w
as
not
upd
atin
g fo
r th
ese
clie
nts.
As
at 3
Ma
y, th
e A
TO
was
stil
l inv
estig
atin
g th
e re
aso
ns fo
r th
e ra
te o
f sus
pen
sion
.
3. C
CT
R In
put f
ile
Fro
m 2
3 A
pril,
thi
s fil
e w
as p
roce
sse
d da
ily a
nd th
ere
was
a b
ackl
og o
f ar
ound
120
0 re
cord
s.
4. D
eter
min
atio
ns
Fro
m 1
9 A
pril,
the
se d
eter
min
atio
ns w
ere
pro
cess
ed
daily
with
no
issu
es
repo
rte
d.
210
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mb
er o
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lem
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g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
O
UT
BO
UN
D P
RO
CE
SS
ING
5. In
com
e V
erifi
catio
n R
espo
nse
Fro
m 2
3 A
pril
201
0, th
is fi
le w
as
proc
esse
d d
aily
. Aro
und
1 p
er c
ent o
f th
e in
com
e ve
rific
atio
n re
spon
se fi
le w
as n
ot b
ein
g se
nt d
ue
to a
n in
corr
ect
reas
on
cod
e. C
entr
elin
k-in
itiat
ed c
lient
inco
me
verif
icat
ion
resp
onse
s af
fect
ed
by
this
issu
e w
ere
sent
via
a m
anu
al w
orka
roun
d. T
he A
TO
pla
nned
to
dep
loy
a fix
for
the
two
unde
rlyin
g pr
oble
ms
on
3 M
ay
(Inf
ra 1
2256
29 —
tw
o re
aso
n co
de
issu
es w
ith r
esp
onse
file
: ‘C
lien
t not
Fou
nd’ b
ein
g pr
ovid
ed
wh
en
actu
al i
nco
me
deta
ils a
re s
uppl
ied;
Pro
vidi
ng
a re
ason
cod
e th
at
inco
me
was
ve
rifie
d w
hen
the
corr
ect o
utco
me
shou
ld b
e N
IL).
6. In
com
e T
ax F
orm
Can
cella
tion
Not
ifica
tion
Fro
m 2
3 A
pril
201
0, th
is n
otifi
catio
n w
as
not
proc
esse
d. A
s at
23
Apr
il, th
ere
wa
s a
back
log
of 9
9 cl
ient
acc
ount
s, 5
5 h
ad b
een
man
ually
che
cke
d w
ith
41 a
cco
unts
re
subm
itted
due
to
othe
r ‘b
usin
ess
as u
sua
l’ tr
ansa
ctio
n ac
tiviti
es. B
y 2
8 A
pril,
Ce
ntre
link
reje
cted
ma
nua
l int
erve
ntio
ns a
s an
opt
ion
. T
he A
TO
pla
nned
to d
epl
oy
fixes
on
7 M
ay
to c
orre
ct m
issi
ng
data
in th
e re
cord
and
fiel
d va
lidat
ion
erro
rs fo
r C
ance
llatio
n N
otifi
catio
ns.
7. F
amily
Tax
Ben
efit
Was
h-up
tran
sact
ions
Fro
m 2
3 A
pril,
the
se tr
ansa
ctio
ns w
ere
proc
esse
d d
aily
. Ho
wev
er, b
y 28
Apr
il 20
10, C
entr
elin
k a
dvis
ed th
at th
ere
we
re m
issi
ng w
ash
up
tran
sact
ions
for
dete
rmin
atio
ns
sent
bet
we
en 1
9 to
25
Feb
ruar
y.
16
Su
per
ann
uat
ion
Co
-Co
ntr
ibu
tio
ns
issu
es
Fro
m 2
4 M
arch
201
0, th
e A
TO
iden
tifie
d a
nu
mbe
r of
pro
ble
ms
(det
aile
d be
low
) re
latin
g to
elig
ibili
ty fo
r, a
ggre
gatio
n of
and
cor
resp
on
denc
e co
ncer
nin
g su
per
annu
atio
n co
-con
trib
utio
ns (
CoC
ons
). T
he A
TO
iden
tifie
d th
at a
num
ber
of f
ixes
had
to b
e de
plo
yed
bef
ore
it co
uld
exe
cute
a C
oC
ons
el
igib
ility
, agg
rega
tion
and
’GA
C e
xecu
tion
run’
. De
laye
d im
plem
ent
atio
n o
f th
e fix
es fo
r th
ese
pro
blem
s im
pact
ed o
n th
e A
TO
’s a
bilit
y to
run
CoC
ons
aggr
egat
ion.
The
AT
O c
onsi
dere
d th
at it
was
unl
ikel
y to
hav
e tim
e to
run
the
CoC
ons
elig
ibili
ty in
Mar
ch a
nd
chec
k th
e re
sults
. It i
dent
ifie
d th
at a
s a
resu
lt,
cred
it in
tere
st w
ill b
e pa
yabl
e fo
r th
e de
lays
.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
The
AT
O c
omm
unic
ated
dir
ect
ly to
Sup
era
nnu
atio
n F
unds
via
em
ails
an
d at
m
eetin
gs to
no
tify
them
of t
he d
ela
ys in
mak
ing
paym
ents
.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
paye
rs m
ay
hav
e su
ffere
d lo
st e
arn
ings
for
paym
ents
that
wer
e m
ade
late
to
thei
r S
uper
ann
uat
ion
Fun
ds.
Thi
s w
oul
d h
ave
been
miti
gat
ed to
the
ext
ent
of th
e in
tere
st th
e A
TO
pai
d fo
r pe
riods
occ
urrin
g af
ter
60 d
ays
of d
ela
y.
211
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Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
T
he A
TO
adv
ises
that
dire
ct p
aym
ents
to r
elev
ant t
axpa
yers
, suc
h as
cer
tain
re
tiree
s, w
ere
mad
e m
anua
lly a
nd o
n tim
e, w
here
as p
aym
ents
to
supe
rann
uatio
n fu
nds
wer
e de
laye
d in
agr
eem
ent
with
the
rele
vant
fund
s. In
tere
st w
ould
be
paya
ble
for
any
paym
ents
mad
e m
ore
than
60
days
in a
rrea
rs.
Spe
cific
pro
blem
s ar
e ou
tline
d be
low
.
1. R
emitt
ance
Agg
rega
tion
On
25 M
arch
201
0, c
orre
ctiv
e ac
tion
of s
ome
rev
iew
item
s in
the
ICP
sys
tem
was
de
ploy
ed.
On
12 A
pril,
the
AT
O d
eplo
yed
a fix
to
reso
lve
a pr
oble
m w
ith a
cor
rupt
ed
mes
sage
set
in th
e ‘E
AI p
acka
ge’ t
hat p
reve
nted
the
AT
O fr
om is
suin
g an
y ‘R
AR
N c
orre
spon
denc
e’. H
owev
er, t
he A
TO
dis
cove
red
anot
her
prob
lem
whi
le
verif
ying
whe
ther
the
fix w
as e
ffect
ive.
Mes
sage
s w
ere
succ
essf
ully
writ
ten
to
files
, how
ever
, som
e m
anda
tory
fiel
ds w
ere
mis
sing
(du
e da
te, E
FT
Ret
urn
Cod
e,
Rec
ipie
nt N
ame
and
othe
r fie
lds
wh
ich
wer
e po
tent
ially
mis
sing
). ‘G
AC
pr
oces
sing
of R
AR
N to
EC
I’ w
as 1
00 p
er c
ent b
lock
ed a
s a
resu
lt. M
anda
tory
da
ta w
as m
issi
ng. T
his
prob
lem
was
fix
ed o
n 20
Apr
il an
d so
me
of th
e ba
cklo
g cl
eare
d (t
hat i
s, J
anua
ry r
emitt
ance
s th
at h
ad b
een
held
sin
ce 1
9 Ja
nuar
y)
rele
asin
g ar
ound
$2.
5 m
illio
n of
the
estim
ated
$30
mill
ion
held
by
com
plet
ing
an
aggr
egat
ion
run
with
out t
he in
itial
CoC
ons
elig
ibili
ty e
ntitl
emen
t run
.
The
AT
O in
tend
ed to
run
a r
emitt
ance
agg
rega
tion
on 2
1 M
ay fo
r re
mitt
ance
s he
ld fo
r F
ebru
ary,
Mar
ch a
nd A
pril.
2. C
o-C
ons
Elig
ibili
ty E
ntitl
emen
t run
On
19 A
pril
2010
, the
AT
O id
entif
ied
that
a n
umbe
r of
impl
emen
tatio
n ch
ange
s an
d fix
es w
ere
requ
ired
as a
res
ult o
f th
e le
gal c
onfo
rman
ce o
utco
mes
(as
a
resu
lt of
cha
nged
lega
l adv
ice)
and
inco
me
tax
rele
ase
go-li
ve. A
lthou
gh, t
he A
TO
co
nclu
ded
that
the
syst
em w
as w
orki
ng to
des
ign,
and
ICP
logi
c al
igne
d to
le
gisl
atio
n, s
ever
al fi
xes
wer
e n
eede
d: In
fra
1196
866
— c
anno
t use
dat
e/tim
e up
date
to d
eter
min
e la
test
ITR
(de
ploy
ed 2
8 A
pril)
; Inf
ra 1
0289
00 —
cor
rect
de
cim
al p
oint
issu
e (d
eplo
yed
29 A
pril)
; Inf
ra 1
2216
06 —
200
8 fo
rms
disp
lays
in
corr
ect t
hres
hold
am
ount
(de
ploy
ed 2
9 A
pril)
; and
Infr
a 12
0767
6 —
Mem
ber
Con
trib
utio
ns S
tate
men
t (M
CS
) fo
rms
canc
ellin
g in
corr
ectly
. The
AT
O s
ched
uled
de
ploy
men
t for
the
fixe
s on
27
Apr
il an
d 4
May
. The
AT
O in
tend
ed to
per
form
de
taile
d de
ploy
men
t ver
ifica
tion
over
a s
ma
ll sa
mpl
e of
clie
nts
from
27
Apr
il to
6
Ma
y. A
ful
l CoC
ons
entit
lem
ent r
un o
ver
the
full
popu
latio
n an
d F
irst H
ome
Sav
ers’
Acc
ount
agg
rega
tion
was
inte
nded
to c
omm
ence
from
7 M
ay.
Thi
s w
as
expe
cted
to in
clud
e ov
er $
100
mill
ion
of n
ew e
ntitl
emen
ts.
212
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
3.
Firs
t Hom
e S
aver
s’ A
cco
unt
(F
HS
A)
Agg
rega
tion
By
23
Apr
il 2
010,
the
AT
O id
entif
ied
that
the
‘RS
A s
upp
lier
link’
was
ca
usin
g F
HS
A in
form
atio
n to
be
inco
rrec
tly r
edi
rect
ed to
the
RS
A s
uppl
ier.
A fi
x to
this
pr
oble
m w
as s
ched
ule
d to
be
dep
loye
d on
21
Ma
y be
caus
e th
e fix
was
de
pen
dent
on
the
reso
lutio
n o
f an
othe
r pr
oble
m w
ith r
ecov
ery
ag
gre
gatio
n w
hic
h w
as
sch
edu
led
to b
e d
eplo
yed
on 1
4 M
ay.
4. M
embe
r C
ont
ribut
ions
Sta
tem
ent (
MC
S)
rem
edia
tion
O
n 23
Mar
ch 2
010,
the
AT
O s
ched
ule
d a
data
fix
to c
ance
l MC
S fo
rms
for
dep
loym
ent
on
27
Mar
ch. O
n 28
Apr
il, th
e A
TO
iden
tifie
d a
proc
ess
bac
klo
g of
893
par
ent f
orm
s, 1
406
’OO
LR r
equ
ests
’ and
169
,000
chi
ld fo
rms.
A fi
x to
th
is p
rob
lem
was
sch
edul
ed to
be
depl
oye
d on
14
Ma
y b
ecau
se th
e fix
wa
s de
pen
dent
on
the
reso
lutio
n o
f an
othe
r pr
oble
m w
ith th
e C
oC
ons
ent
itlem
ent
ru
n w
hic
h w
as s
ched
ule
d to
be
dep
loye
d on
3 M
ay.
5.
Rec
over
y A
ggre
gatio
n
By
23
Mar
ch 2
010,
the
AT
O id
entif
ied
two
prob
lem
s w
ith r
eco
veri
es. T
he
‘PV
A a
mou
nt’ w
as
not b
eing
take
n in
to c
onsi
dera
tion
and
mul
tiple
tr
ansa
ctio
ns w
ere
bein
g ge
ne
rate
d. T
he A
TO
pla
nned
to fi
nish
the
code
fix
by
16 A
pril.
Ho
we
ver,
the
date
for
depl
oym
ent
was
sch
edul
ed fo
r 14
Ma
y an
d ex
pect
ed
to r
un
on 2
8 M
ay.
17
Inco
rrec
t d
ive
rsio
n o
f in
tera
ctiv
e v
oic
e re
spo
nse
(IV
R)
calls
— w
her
e’s
my
refu
nd
sel
f h
elp
The
‘Whe
re’s
My
Ref
und
?’ IV
R w
as
desi
gned
to a
llow
taxp
aye
rs to
qu
ery
the
stat
us o
f the
ir in
com
e ta
x lo
dgem
ent,
by
prov
idin
g th
eir
TF
N to
the
phon
e se
rvic
e.
In th
e si
tuat
ion
wh
ere
a cl
ient
’s lo
dgem
ent h
ad b
een
rec
eive
d, p
roce
ssed
, bu
t a
disb
urse
me
nt
(ref
und)
rec
ord
had
not
bee
n c
reat
ed, t
he IC
P s
yste
m w
as
inco
rrec
tly d
ive
rtin
g th
e cl
ient
to a
con
tact
cen
tre
wh
en th
e IV
R s
hou
ld h
ave
prov
ided
the
clie
nt w
ith th
e re
quir
ed in
form
atio
n.
Als
o, th
e sy
ste
m c
ould
not
dro
p th
e ca
ller
into
the
AT
O’s
mai
n e
nqui
ries
te
lep
hone
qu
eue
dir
ectly
du
e to
prio
rity
rout
ing
give
n to
dro
p ou
ts, a
nd tr
unk
ca
paci
ty is
sues
. The
AT
O im
plem
ente
d an
inte
rim s
olut
ion
on
30 A
pril,
ch
angi
ng
the
reco
rded
mes
sage
to te
ll ca
llers
to te
leph
one
the
AT
O’s
gen
eral
en
qui
ries
tele
pho
ne
num
ber.
A p
erm
anen
t fix
was
pla
nned
to
be d
epl
oye
d o
n 7
Ma
y.
Thi
s pr
oble
m a
ttrac
ted
neg
ativ
e m
edia
atte
ntio
n.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
On
7 A
pril,
the
AT
O c
hang
ed
its r
ecor
ded
resp
onse
on
this
tel
eph
one
num
ber
to a
sk t
axpa
yers
to
call
13 2
8 61
.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
paye
rs w
ere
req
uire
d to
mak
e an
othe
r te
leph
one
call
to th
e A
TO
cal
l ce
ntre
.
213
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
18
Ver
ify
sup
er in
com
e ta
x o
ffse
t
Und
er th
e ta
x la
ws,
onl
y th
ose
taxp
aye
rs a
ged
60
year
s or
old
er w
ere
ent
itled
to
a 1
0 pe
r ce
nt
offs
et o
n th
e un
taxe
d el
eme
nt o
f cer
tain
am
ount
s.
On
28 A
pril
20
10, t
he A
TO
iden
tifie
d th
at th
e sy
stem
wa
s ca
lcul
atin
g a
10
per
cent
offs
et o
n th
e un
taxe
d e
lem
ent f
or a
roun
d 11
,00
0 ta
xpa
yers
wh
o w
ere
be
twe
en 5
5 an
d 60
yea
rs o
ld a
nd m
embe
rs o
f a d
efin
ed b
ene
fits
fund
,.
The
AT
O u
sed
its s
afet
y ne
t to
sto
p th
ese
form
s fr
om p
roce
ssin
g. T
he A
TO
ad
vise
s th
at s
om
e ta
x re
turn
s no
t cau
ght
by
the
safe
ty n
et w
ere
issu
ed
resu
lting
in a
n in
crea
sed
refu
nd.
The
se a
mo
unt
s w
ere
need
ed to
be
rem
itted
to
the
AT
O.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
No
AT
O c
omm
unic
atio
n in
an
y g
ener
al b
roa
dcas
t exp
lain
ed
to ta
xpa
yers
or
tax
prac
titio
ner
s w
hy
thes
e er
rors
we
re o
ccur
ring.
No
AT
O c
omm
unic
atio
ns o
f the
issu
e w
ere
mad
e in
AT
O-in
itiat
ed ta
rget
ed
com
mun
icat
ion
s (s
uch
as e
ma
ils, l
ette
rs o
r ou
tbou
nd
tele
pho
ne c
alls
)
The
re is
no
evid
ence
that
AT
O c
all c
entr
e st
aff
wer
e ab
le to
exp
lain
the
reas
ons
for
the
se e
rror
s if
the
se ta
xpa
yers
’ rep
rese
ntat
ives
cal
led
to a
sk w
hy
thes
e er
rors
ha
d oc
curr
ed.
Impa
ct o
n ta
xpa
yers
an
d ta
x pr
actit
ione
rs
Tax
pra
ctiti
one
rs a
nd ta
xpa
yers
wh
o m
ade
repe
ated
ca
lls w
ere
told
that
the
mat
ter
had
bee
n es
cala
ted.
Cal
lers
we
re n
ot g
ive
n a
time
perio
d fo
r co
mpl
etio
n w
hic
h w
as
kept
.
Tax
paye
rs e
xpec
ting
a re
fund
from
an
amen
dmen
t w
ere
forc
ed to
wai
t lo
nge
r th
an a
ntic
ipat
ed
for
thei
r re
fun
d, s
omet
imes
man
y m
onth
s.
19
Inco
rrec
t in
form
atio
n o
n N
oti
ces
of
Am
end
ed A
sses
smen
t (N
OA
As
) —
pre
vio
us
taxa
ble
inco
me
sho
wn
as
$0.0
0, a
nd
imp
acts
Inte
rest
fo
r O
verp
aym
ent
(IO
P)
calc
ula
tio
ns
Thi
s pr
oble
m im
pact
ed c
omp
any
and
sup
er fu
nd a
me
ndm
ent
s. T
he IC
P
acco
unt
wa
s co
rrec
t. H
ow
eve
r, th
e A
TO
hel
d a
ll N
OA
As/
SO
As
sinc
e 27
Ap
ril
201
0 an
d w
orke
d to
rel
eas
e n
on-im
pac
ted
corr
esp
ond
ence
from
3 M
ay.
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
No
AT
O c
omm
unic
atio
n in
an
y g
ener
al b
roa
dcas
t exp
lain
ed
to ta
xpa
yers
or
tax
prac
titio
ner
s w
hy
thes
e er
rors
we
re o
ccur
ring.
No
AT
O c
omm
unic
atio
ns o
f the
issu
e w
ere
mad
e in
AT
O-in
itiat
ed ta
rget
ed
com
mun
icat
ion
s (s
uch
as e
ma
ils, l
ette
rs o
r ou
tbou
nd
tele
pho
ne c
alls
).
The
re is
no
evid
ence
that
AT
O c
all c
entr
e st
aff
wer
e ab
le to
exp
lain
the
reas
ons
for
the
se e
rror
s if
the
se ta
xpa
yers
’ rep
rese
ntat
ives
cal
led
to a
sk w
hy
thes
e er
rors
ha
d oc
curr
ed.
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
Tax
pra
ctiti
one
rs a
nd ta
xpa
yers
wh
o m
ade
repe
ated
ca
lls w
ere
told
that
the
mat
ter
had
bee
n es
cala
ted.
Cal
lers
we
re n
ot g
ive
n a
time
perio
d fo
r co
mpl
etio
n w
hic
h w
as
kept
.
Tax
paye
rs e
xpec
ting
a re
fund
from
an
amen
dmen
t w
ere
forc
ed to
wai
t lo
nge
r th
an a
ntic
ipat
ed
for
thei
r re
fun
d, s
omet
imes
man
y m
onth
s.
214
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
20
Su
spen
se it
ems
con
trib
uti
ng
to
del
ays
in a
sses
sin
g r
etu
rns
and
issu
ing
N
oti
ces
of
As
ses
smen
t (N
OA
s)
A ‘s
uspe
nded
’ inc
ome
tax
retu
rn fo
rm m
eans
tha
t the
ret
urn
cann
ot b
e as
sess
ed
by
the
AT
O’s
sys
tem
with
out i
nter
vent
ion.
Thi
s m
eans
that
no
amou
nts
will
be
post
ed to
the
taxp
aye
r’s a
ccou
nt u
ntil
the
pro
blem
is
reso
lved
.
Sin
ce d
eplo
ymen
t of t
he in
com
e ta
x re
leas
e u
p to
16
Jun
e 20
10,
the
ICP
sy
stem
sus
pen
ded
669
,571
tim
es. A
lthou
gh,
sus
pens
ions
are
exp
ecte
d as
pa
rt o
f the
nor
mal
op
erat
ion
of th
e sy
stem
s, a
nd s
imila
r fu
nct
iona
lity
(suc
h a
s ex
cept
ions
and
err
or c
odes
) w
ere
a fe
atur
e of
the
AT
O’s
pre
-exi
stin
g sy
stem
s, th
ese
con
trib
ute
d to
the
over
all
del
ays
exp
erie
nce
d in
pro
cess
ing
retu
rns.
Sus
pens
ions
wer
e a
lso
sym
ptom
s o
f ot
her
und
erly
ing
pro
blem
s —
fo
r ex
ampl
e, th
e A
TO
-Cen
trel
ink
MC
R (
refe
rred
to a
bov
e).
The
AT
O a
dvis
es th
at it
doe
s no
t pla
n to
det
erm
ine
how
lon
g th
e pe
riod
s o
f su
spe
nsio
ns c
ontr
ibut
ed to
the
dela
ys in
issu
ing
NO
As.
The
re w
ere
diffe
rent
typ
es o
f sus
pens
ions
. Som
e w
ere
easi
ly r
eso
lve
d –—
fo
r ex
ampl
e, ta
xpa
yers
inse
rte
d tw
o bl
ank
sp
aces
bet
we
en
wo
rds/
num
bers
in
the
addr
ess
line
rath
er th
an
one
(su
ch ’8
_ _
Sun
ny_
Str
eet’
rath
er th
an
’8_S
unn
y_S
tre
et’.
Ho
wev
er, t
here
we
re a
lso
sus
pens
ions
that
nee
ded
to b
e re
solv
ed b
y e-
fixes
.
The
AT
O u
sed
its s
ubst
antia
l num
ber
s of
sta
ff to
ass
ist i
n re
solv
ing
susp
ens
ions
and
man
ually
pro
cess
ing
retu
rns
for
thos
e ta
xpa
yers
cla
imin
g ha
rdsh
ip (
see
Cha
pter
3 fo
r m
ore
deta
il).
Rel
eva
nt
AT
O c
om
mu
nic
atio
ns
On
15 M
arch
201
0, th
e S
econ
d C
omm
issi
oner
issu
ed
an u
pdat
e sa
yin
g,
’At o
ur la
st u
pd
ate
on 2
Mar
ch 2
010,
we
we
re o
n tr
ack
to is
sue
the
rem
ain
ing
stoc
kpile
d re
fun
ds a
nd a
sses
sme
nts
for
inco
me
tax
retu
rns
lod
ged
in F
ebru
ary
by
the
en
d of
last
we
ek.
Last
wee
k w
e ex
peri
ence
d so
me
min
or p
robl
ems
wh
ich
have
del
aye
d us
is
suin
g so
me
of
thos
e re
mai
nin
g st
ockp
iled
refu
nds
and
ass
essm
ents
wh
ile
we
ensu
re th
e in
tegr
ity o
f our
dat
a.
The
re a
re a
ppro
xim
ate
ly 2
00,0
00 s
tock
pile
d as
sess
me
nts
yet t
o is
sue
(of
wh
ich
we
est
imat
e 10
0,00
0 ar
e re
fund
s). T
hese
incl
ude
asse
ssm
ents
w
hic
h in
volv
e a
bab
y bo
nus,
ent
repr
ene
ur ta
x of
fset
, prim
ary
prod
uctio
n av
era
gin
g, e
xem
pt fo
reig
n em
plo
ymen
t inc
om
e, s
peci
al p
rofe
ssio
nal
av
era
gin
g, e
ligib
le te
rmin
atio
n p
aym
ents
or
supe
rann
uatio
n lu
mp
sum
pa
yme
nts
and
non-
resi
den
t w
ithho
ldin
g ta
x.
We
have
fixe
d th
ese
min
or p
robl
ems
and
can
star
t rel
easi
ng
mos
t of t
hese
re
fund
s a
nd a
sses
smen
ts fr
om
toda
y (w
ith th
e e
xce
ptio
n of
ass
essm
ents
in
volv
ing
non-
resi
den
t w
ithho
ldin
g ta
x).
We
rem
ain
com
mitt
ed to
ens
ure
the
relia
bilit
y of
our
pro
cess
es e
ven
if th
is
slo
ws
us d
ow
n.’
On
22 M
arch
201
0, th
e A
TO
rel
eas
ed it
s T
ax A
gent
Mag
azi
ne in
wh
ich
the
C
omm
issi
oner
sai
d,
’Of c
ours
e, th
e bi
g m
ove
on th
e te
chno
logy
fro
nt f
or t
he A
TO
so
far
this
ye
ar is
the
deci
sion
we
mad
e in
Jan
uar
y to
pro
cee
d w
ith o
ur n
ew
inco
me
tax
syst
em.
…
We
are
repl
acin
g th
e sy
stem
we
have
be
en u
sin
g to
pro
cess
inco
me
tax
retu
rns
sinc
e th
e 19
70s.
Giv
en th
e si
ze a
nd s
igni
fican
ce o
f the
cha
ng
e, th
ere
has
be
en a
sub
stan
tial
leve
l of t
estin
g fo
r th
is c
hang
e a
nd, s
o fa
r, th
e ch
ange
over
has
be
en g
oin
g ac
cord
ing
to p
lan.
Nev
erth
eles
s, a
ny m
ajor
ne
w s
yste
m w
ill r
aise
its
ow
n ch
alle
nges
, so
the
cont
inui
ng
patie
nce
and
su
ppor
t of t
he ta
x pr
ofes
sio
n is
ap
pre
ciat
ed.
’
215
Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
On
20 A
pril
20
10, t
he S
eco
nd C
omm
issi
one
r is
sued
an
upd
ate
whi
ch w
as
pub
lish
ed o
n th
e A
TO
web
site
sa
ying
,
’Ove
rall
are
we
hap
py
with
the
impl
eme
ntat
ion
of th
e ne
w in
com
e ta
x pr
oces
sing
sys
tem
?
Yes
.
Whi
le w
e ha
ve h
ad s
ome
pro
ble
ms,
yo
u w
oul
d e
xpec
t tha
t w
ith a
n im
plem
enta
tion
of a
n IT
sys
tem
as
larg
e as
thi
s on
e. T
here
hav
e b
een
no
criti
cal s
yste
ms
prob
lem
s. O
vera
ll, th
e ne
w in
com
e ta
x pr
oces
sin
g sy
stem
is
wo
rkin
g w
ell
and,
as
the
figur
es d
emon
stra
te, t
he v
ast m
ajor
ity o
f pr
oces
sing
has
bee
n co
mpl
eted
.
We
kno
w s
ome
peo
ple
have
exp
erie
nced
del
ays
and
frus
trat
ion
caus
ed
by
our
esse
ntia
l sys
tem
s u
pgra
de.
Unf
ortu
nate
ly, t
he s
ize
of th
e sy
stem
s w
e de
al w
ith m
ean
s th
ey
are
incr
edib
ly c
omp
lex.
Als
o, g
iven
the
impo
rta
nce
of
the
tax
and
su
pera
nnu
atio
n sy
stem
s to
Aus
tral
ia,
we
nee
d to
ens
ure
the
relia
bilit
y of
our
pro
cess
es.
We
appr
ecia
te t
he p
atie
nce
and
sup
port
pe
opl
e h
ave
sho
wn
us a
nd
apo
log
ise
for
the
inco
nven
ien
ce.’
On
29 A
pril
20
10 th
e C
omm
issi
oner
pub
lishe
d a
mes
sag
e o
n th
e A
TO
w
ebs
ite s
ayi
ng
(am
ongs
t oth
er
thin
gs):
’Unf
ortu
nate
ly w
e di
d ru
n in
to t
wo
una
ntic
ipat
ed is
sues
with
the
ne
w
syst
em th
at c
aus
ed d
ela
ys o
uts
ide
wh
at w
e ha
d or
igin
ally
pla
nne
d.
One
del
aye
d m
atte
rs fo
r tw
o w
eeks
(w
hic
h al
so h
ad a
n im
pac
t on
retu
rns
still
com
ing
in t
o us
), a
nd th
e ot
her
resu
lted
in 1
40,0
00 r
efu
nd c
hequ
es n
ot
prin
ting.
Ho
we
ver,
thes
e ch
equ
es w
ere
se
nt la
st w
eek
.
The
se s
orts
of t
hing
s ar
e no
t un
usua
l wh
en
impl
eme
ntin
g a
sys
tem
of
this
si
ze, h
ow
eve
r it
adde
d to
the
time
in w
hic
h w
e co
uld
not p
roce
ss r
etur
ns. I
t m
eant
a lo
nger
-last
ing
impa
ct o
n ta
xpa
yers
and
tax
prac
titio
ners
than
we
had
orig
ina
lly e
xpec
ted.
Des
pite
the
dela
ys, o
ur n
ew
sys
tem
has
pro
cess
ed m
ore
than
tw
o m
illio
n ta
x re
turn
s, in
clud
ing
one
mill
ion
refu
nds
. Sin
ce e
arly
Apr
il w
e ha
ve
proc
esse
d al
l ne
wly
lodg
ed r
etur
ns a
s pe
r o
ur s
ervi
ce s
tand
ard
s (9
4 pe
r ce
nt o
f ele
ctro
nic
retu
rns
in 1
4 da
ys a
nd
80 p
er c
ent o
f pa
per
ret
urns
with
in
42 d
ays
). W
e to
ok a
cau
tious
app
roac
h du
rin
g ou
r ra
mp
up
of th
e pr
oces
sing
of r
etur
ns to
ens
ure
the
accu
racy
of t
he c
alcu
latio
ns in
as
sess
men
ts.
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Review into the Australian Taxation Office's Change Program
Nu
mb
er o
f p
rob
lem
on
g
rap
hic
Des
crip
tio
n o
f p
rob
lem
R
ele
van
t p
ub
lic A
TO
co
mm
un
icat
ion
of
the
issu
e an
d t
he
imp
act
on
ta
xpa
yers
an
d t
ax p
ract
itio
ner
s
We
do n
ot h
ave
a st
ockp
ile o
f re
turn
s w
aiti
ng to
be
proc
esse
d. H
ow
eve
r,
as is
nor
ma
lly th
e ca
se, t
here
will
alw
ays
be
som
e re
turn
s in
our
sys
tem
be
caus
e:
we
need
to s
crut
inis
e hi
gh
risk
refu
nds
that
cou
ld in
dic
ate
frau
d
ther
e is
a ta
x d
ebt o
win
g or
an
oblig
atio
n d
ue
to th
e C
hild
Sup
por
t Age
ncy
and/
or C
entr
elin
k
ther
e is
info
rmat
ion
mis
sing
or
inco
rrec
t in
the
retu
rn th
at w
e ne
ed to
fo
llow
-up
with
the
taxp
aye
r or
age
nt, a
nd/o
r
peo
ple
have
lodg
ed
seve
ral y
ears
’ wor
th o
f out
stan
din
g re
turn
s w
ith th
eir
200
8-09
ret
urn
.
I ass
ure
you
we
have
wo
rke
d ex
trem
ely
hard
to
min
imis
e th
e im
pact
of
the
new
sys
tem
on
tax
agen
ts a
nd
the
com
mun
ity.’
At t
he 1
Jun
e 2
010
Se
nate
Est
imat
es h
eari
ng,
the
AT
O g
ave
the
follo
win
g ev
iden
ce:
’Mr
D’A
scen
zo —
As
I sai
d, fr
om 1
Apr
il w
e w
ere
bac
k on
nor
mal
pr
oces
sing
tim
es. T
here
are
alw
ays
som
e re
turn
s th
at a
re o
utst
andi
ng. I
ha
ve in
dica
ted
that
and
som
e of
the
reas
ons
wh
y so
me
of th
ose
retu
rns
are
outs
tan
din
g. It
is n
ot a
que
stio
n of
the
syst
em n
ot w
ork
ing.
As
of 1
Apr
il th
e sy
stem
has
bee
n w
ork
ing
to s
peci
ficat
ion.
’
Imp
act
on
tax
pay
ers
and
tax
pra
ctit
ion
ers
AT
O p
ublic
co
mm
unic
atio
ns in
rel
atio
n to
this
pro
blem
do
not
rec
onci
le w
ith
wh
at h
ad
actu
ally
ha
ppe
ned.
AT
O c
omm
unic
atio
ns d
id n
ot in
dica
te th
e m
ain
re
aso
n fo
r de
lays
— p
robl
ems
with
the
syst
em
that
pre
vent
ed r
etur
ns fr
om
bein
g as
sess
ed
and
NO
As
bei
ng
issu
ed.
In fa
ct, t
he A
TO
com
mun
icat
ions
ap
pea
r to
giv
e th
e im
pres
sion
tha
t non
e of
the
dela
ys w
ere
attr
ibut
able
to
prob
lem
s w
ith t
he s
yste
m.
Tax
pra
ctiti
one
rs in
curr
ed
unp
rodu
ctiv
e w
ork
in c
onta
ctin
g th
e A
TO
re
peat
edly
to c
heck
on
the
prog
ress
of r
etur
ns .
If th
e A
TO
had
initi
ated
cle
ar
com
mun
icat
ion
of t
his
prob
lem
if a
nd w
hen
it fir
st b
ecam
e a
war
e of
it, t
hen
muc
h of
this
ad
vers
e im
pac
t cou
ld h
ave
bee
n re
duce
d if
not a
void
ed.
Add
ition
ally
, ta
xpa
yers
and
tax
prac
titio
ner
s su
ffere
d th
e ef
fect
s of
red
uce
d ex
pect
ed
cash
flo
ws
due
to th
e co
ntrib
utio
n of
this
pro
blem
to d
ela
ys.
As
a re
sult
taxp
aye
rs a
nd ta
x pr
actit
ion
ers
hav
e re
duc
ed
conf
iden
ce in
the
AT
O’s
adm
inis
trat
ion
of th
e sy
stem
.
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Review into the Australian Taxation Office's Change Program
APPENDIX 12 — ATO’S SERVICE STANDARD PERFORMANCE
JANUARY 2010 — JUNE 2010
A.12.1 The diagram on the following page reproduces the ATO’s advice to the IGT on its service standard performance for individual income tax returns lodged electronically.
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Review into the Australian Taxation Office's Change Program
APPENDIX 13 — KEY RECOMMENDATIONS FROM CPT
GLOBAL’S REPORT, RELEASE 3 — INCOME TAX
IMPLEMENTATION REVIEW
Tax Office ICT Capability
The Tax Office vision for ICP was that it would provide a generic capability that could be configured to include new tax products and processing changes. In essence, ICP has the complexity of a package but is unique to the Tax Office and is supported by Tax Office IT. This is very different from using Commercial Off The Shelf (COTS) product where code changes and ongoing improvements are made, tested, released and supported by a specialist software organisation such as Seibel or SAP
The Tax Office has developed a good foundation of knowledge and experience during the period of the Change Program. This must be consolidated now that the primary role of Accenture has been completed.
Recommendations:
1. The reliance on Accenture to some degree going forward should be advisory so that the Tax Office takes the lead and Accenture supports.
2. Knowledge transfer from Tax Office staff involved in the Change Program needs to be harvested as does the Accenture ICP enterprise architectural knowledge.
3. While the Tax Office has developed good solution architecture knowledge of ICP, it needs to develop mature ICP Enterprise skill so that it is capable of assessing the strategic architecture issues that the Henry and Cooper Review will demand.
4. The Tax Office should develop a process for consulting with Government on implementing new requirements using ICP as a COTS product. This “methodology” and consultation process will be essential to ensure that the generic and configuration capabilities of the Change Program investment are realised.
5. The Tax Office considers the ICP framework as a strategic asset for implementing changes using a configuration approach. The Tax Office must consider different approaches to release management, testing, operational management and support with ICP and ensure they don’t fall back to a NTS process which was based on a custom code approach. This approach should recognise ICP as having the characteristics of a COTS product.
Operational Management of ICP
The Tax Office has been supporting the implementation of ICP releases since 2008. Over that time it has developed a mature ATO Integrated Support Model. While this model is appropriate for new releases and major situation management, it is not something that can be sustained going forward.
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Review into the Australian Taxation Office's Change Program
Recommendations:
6. There is a need to consider an operational function that replaces the activities of the Nerve Centre. This “problem avoidance” capability for operational control of the system (not operations management) provides daily monitoring technical and business queues, monitoring and use of the Safety Net, load balancing performance and capacity using trickle batch and other controls.
7. Performance tuning and monitoring. While the capacity plan indicates that there is sufficient capacity to support Tax Time releases for the next 12 to 18 months, the Tax Office should continue to monitor performance — particularly DB2 which can degrade performance if not optimised.
8. The Tax Office should minimise the number of eFixes that implemented into production so that risks to business operations are reduced. Ideally the majority of eFixes should be consolidated into planned releases that justify the comprehensive testing that a COTS product would normally involve.
9. The Tax Office should consider differentiating between ICP configuration changes and ICP code changes. ICP configuration (cFixes) changes should require less testing as they are generally product specific. ICP code changes, especially eFixes should be subject to more rigorous testing.
Enhancements to R3 / ICP
Now that the Tax Office has implemented the full scope of ICP and converted the majority of Income Tax products to ICP, a number of additional investments should be made in the following areas.
Recommendations:
10. Business rules for ICP are managed through a MS Access database and represent a future area of risk due to the lack of processing controls and versioning capabilities. A COTS Business Rules Management System (BRMS) should be considered as a strategic replacement for the MS Access Database. An industry leading product in this area is ILOG which has been purchased by IBM and will become the rules engine for WebSphere Process Server.
11. The Tax Office needs to review the relevance of the backlog of Severity 3 and 4 defects that have been stockpiled over a number of releases of ICP. The definition of Severity 3 is that it is a business requirement that has not been met. A review of these defects should be made so that they can be removed from consideration or scheduled into a release.
12. The Tax Office should increase the controls and instrumentation relating to the operational management of ICP. This include further enhancement of the business transaction reconciliation, MQ monitoring leveraging Omegamon, instrumentation of Trickle Batch. Further enhancement of the Safety Net with consideration of its application for Outbound.
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APPENDIX 14 — CAPGEMINI’S AUGUST 2008
RECOMMENDATIONS TO THE ATO
A.14.1 The following recommendations are reproduced from Capgemini’s report to the ATO, Australian Taxation Office Easier, Cheaper and More Personalised Change Program, Independent Assurer Report Version 1.2, Period covering 1st August 2008 — 31st August 2008.
1. Enforce Stage Containments across Build & Test which include meeting all entry & exit criteria and ensuring that end to end testing of all components occurs during PT and IPT
2. Improve test reporting to focus on testing effectiveness, test progress and test coverage
3. When delivery milestones change or change requests occur, investigate and document the impact on schedule, scope, and people to define that quality will be maintained
4. Empower BESS to clarify and manage severity definitions to ensure that Business and Change Program share a common understanding and method for managing issues
5. Change Program re-communicates and re-educates the Build & Test teams on their roles and responsibilities
6. Go live support must use the same tools and processes, utilised by BESS
7. Use Test Director as the single source of truth for test planning, execution & reporting
8. Change Program keeps the traceability matrix up-to-date to enable targeted regression testing and assisting change management
9. Ensure that key designers, builders & testers are involved all stages of delivery
10. Reinforce that key leadership roles for test have the mandate to stop progress and an understood escalation path if they feel that quality will be compromised
11. Key leaders in testing have appropriate experience and consideration is also given to certifications in industry test standards, such as: CSTE, ISTQB or CSQA
12. Divide business and technical components into separate documents for design and code table management
13. Use tools to automate regression testing, eg Winrunner
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14. Plan frequent drops for Severity 1 defects; plan longer cycles for major build activities and other defects during test.
15. Ensure there is an alignment of top down and bottom up estimates that drive the end schedule.
16. Conduct testing on converted data starting in Product test phase
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Review into the Australian Taxation Office's Change Program
Earlier this year this deployment attracted a lot of media interest and other comments because of delays experienced in the processing of income tax returns. With the deployment of a system as large and complex as the Income Tax system, there was always going to be significant delays and the ATO had warned of this for a number of years. In particular, the ATO took active steps to directly inform tax agents and their professional associations that the ATO would have to stop processing returns for several weeks leading up to the deployment.
The new Income Tax system provides the ATO with a modern platform and processing system which will serve Australia’s taxpayers well for many years into the future. Despite some problems in the early phases of bedding down the new system, it is now performing well overall and any identified issues are being managed. During our very busy Tax Time 2010 period, as at 14 November 2010, we have finalised the processing of 10.23 million returns and issued 8.4 million refunds with a value of $21.69 billion. In relation to individual returns lodged electronically the ATO:
• Finalised the processing of 54% of returns received in July within 14 days (94% were finalised in 29 days);
• Finalised the processing of 90% of returns received in August within 14 days;
• Finalised the processing of 93.2% of returns received in September within 14 days; and
• Finalised the processing of 95.2% of returns received in October within 14 days.
Deployment of the new Income Tax System
In the lead up of the deployment of the new Income Tax system, the ATO undertook very broad ranging consultation, communication and engagement activity to inform taxpayers, tax agents and professional and industry associations which represent tax agents, that there would be delays for many weeks in the processing of tax returns. The various professional associations were a key part of these communication activities because the ATO has longstanding protocols that the professional associations should be the main conduit between the ATO and tax agents.
Overall, these communications were largely directed at the tax profession because taxpayers who lodge their own return should have done so by 31 October 2009.
It was made clear in ATO communications that all returns lodged after the end of December 2009 and up to mid February 2010, could not be processed until the new system was implemented and these returns would have to be stockpiled. This approach enabled the ATO to complete the processing of returns in the old system, before the end of January 2010, when we had to convert a very large amount of data from the old to the new system. This required the conversion of 27 million taxpayer records, 32 million accounts and 282 million forms.
One of the unique complexities of this deployment was that the new system had to have the tax changes for each of the years 2001 to 2009 incorporated to enable the ATO to process current and prior year returns as well as amendments. This meant that the ATO had to build and test the functionality for the 2009 tax year as well as the code for each of the previous eight years.
Stockpiling of Returns
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Review into the Australian Taxation Office's Change Program
The end of January 2010 was chosen for the deployment of the new Income Tax system because while the ATO processes over 14 million returns a year, during the January/February period we typically would only receive about 5% of these returns. Despite January and February being a quieter period, by mid February 2010 there were approximately 700,000 income tax returns stockpiled in the ATO.
In the various ATO website updates issued during the February to June 2010 period, it was noted that the ATO estimated that approximately half of the returns expected to be lodged between January and June would result in a refund. Of the 3.8 million returns processed in that period 55% resulted in a refund.
The ATO communications leading up to the deployment of the new Income Tax system encouraged taxpayers and their agents to file as many returns as possible before the end of December 2009, particularly those returns where a refund was expected. Amongst other things, this included the ATO telephoning over 3800 tax agents, who would normally lodge more than 100 returns during December and January, to remind them of the delays which would be experienced and again, they were encouraged to lodge as many returns as possible before the end of December 2009.
It is clear that some taxpayers and tax agents took note of the ATO’s communications and lodged more tax returns before the end of December 2009, particularly returns where refunds were expected. A number of tax agents have advised the ATO that they were able to plan their work to take account of the period of time the ATO needed to stockpile returns and thereby minimise the impacts of the deployment of the Income Tax system. The ATO has provided you with the contact details for a number of these agents.
However, putting aside the change in the number of returns lodged in the year ended 30 June 2009 because of the Tax Bonus, there was very little overall change in the flow of returns received during December 2009 to March 2010 compared to the same period in the previous two years. It is now clear that the very extensive communications the ATO undertook were not successful in bringing about any significant change in the lodgement pattern of taxpayers and their agents. Clearly it would have been very beneficial if more returns were lodged before the end of December 2009 but it is appreciated that it may have been difficult for some agents to do this.
Processing of Returns
During December 2009 and January 2010 the ATO worked hard to finalise the processing of as many returns as possible. By the end of December there were 120,498 unprocessed returns on hand and this compares favourably to the number of unprocessed returns on hand at 31 December 2007 — 156,497 and 31 December 2008 — 228,634.
During January 2010 the ATO finalised the processing of 84,853 of the returns on hand at the end of December 2009 and issued 56,697 refunds. Most of the remaining unprocessed returns (35,645) were included with the returns to be processed in the new system. However, some of these returns were held due to the need to investigate possible overstated or fraudulent claims.
Full processing of returns in the new Income Tax System commenced in mid February 2010 and by the end of February 2010, all stockpiled returns (over 700,000) were entered into the new system. A further 300,000 returns were lodged by the end of February. After two weeks of processing by the end of February, we had finalised the processing of over 560,132 returns and issued 250,540 refunds.
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While large numbers of returns were able to be successfully processed during the period from February to June 2010 (see Attachment 1); the delays experienced by some taxpayers and agents caused great concern.
There was a large increase in the number of complaints received and the number of requests for urgent refund processing was also much higher. As noted in your report, our people in the ATO worked very hard to finalise the processing of all returns and deal with client enquiries and complaints.
Communications
From early February to late April 2010 there was significant media interest in the delays experienced with the processing of tax returns. The ATO sought to keep the community informed by issuing a number of website updates detailing the number of returns being processed as well as the number of assessments and refunds which had issued or would shortly issue. At the same time and in order to keep tax agents abreast of developments, more detailed information was provided to their professional associations and to tax agents directly.
Where a taxpayer or an agent was waiting for an assessment or refund, understandably the broader information provided in the website updates did not help them find out what was happening with the processing of their particular assessment and refund. It was necessary for these taxpayers and agents to contact the ATO directly and although many additional staff were available to answer calls, at times due to the volume of calls received, it was difficult to speak with an ATO officer. Furthermore, our people were becoming familiar with a new system and initially they were not always able to assist taxpayers and their agents as much as they would have liked.
Given the reaction of taxpayers and tax agents in the early part of this year, clearly some of the ATO’s communications were not fully understood and with the benefit of hindsight, we could have structured some of our communications differently.
For example, it is now apparent that some tax agents believed that once we had started to use our new system all stockpiled returns would be processed and assessments finalised within a very short period of time, if not immediately. The reality always was that it would take the ATO many weeks after mid February, to complete the processing of the stockpiled returns. Although we had frequently mentioned in our communications there would be extended delays, more contextual information would have been helpful to enable taxpayers and their agents to gain a greater appreciation of the time it would take the ATO to process the stockpiled returns.
Another example is the steps the ATO took to inform tax agents and their professional associations about the new notices of assessment and statements of account which were issued by the new Income Tax system. Although these new notices and statements were designed with significant input from tax agents, some agents were dissatisfied with a number of aspects of the notices and statements.
Our communications highlighted the changes that tax agents would see and copies of the new notices and statements as well as supporting material, were made available to agents and professional associations in December 2009 and again in January 2010. However, we underestimated the time it would take for some agents to become familiar with these new forms and then consider the implications for their practice given the number of extra pages of information agents would receive for each of their clients. It is now clear that on occasion the detailed information provided to professional associations was not always understood and
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sometimes not passed onto tax agents. Overall, the ATO should have communicated more directly with agents during this period.
A number of changes have already been made to both the notices and statements which have been based on the feedback we have received.
Risks with the deployment of the Income Tax system
The deployment of a system of the size and complexity of the new Income Tax system always comes with considerable risks. As already noted, in addition to being the largest information technology system ever deployed by the ATO, the ATO’s independent assurers have noted that this system is perhaps the largest IT system ever deployed in Australia — including both the public and private sectors.
Your report notes that at the time of deploying the new Income Tax system, there were a number of known defects in the system and it was likely that new defects would be found once the system was in use. Given this the ATO had comprehensive mitigation strategies in place and these are also referred to in your report.
A separate independent review undertaken by CPT Global, after the deployment of the Income Tax system, concluded that the ATO had “…successfully implemented a complex program of work”. In that report it also noted that “…No deployment is totally without risk and while there have been some impacts on the Tax Community; the Tax Office has significantly mitigated the impacts through its risk management and governance processes.” 1
One of the steps to mitigate the risks of the deployment of such a large and complex system was the use of a Safety Net to stop the processing of certain returns if we were not confident that an assessment would be correct. This often, but not always, required a change to the system before the processing of the returns could be finalised.
Problems
Your report notes there were a number of different issues and problems the ATO had to resolve during the early stages of the implementation of our new system. However, two larger problems arose and the first of these stopped the processing of returns for ten days in early March. Understandably this had a direct impact on those taxpayers and agents who were awaiting an assessment and perhaps a refund.
In early March a change was being introduced to the system which had the unintended consequence of altering the notices of assessment for about 145,000 returns. Although all the calculations in these assessments were correct, the change made to the system resulted in the taxable income being shown as nil, irrespective of the actual taxable income. In order to correct these notices of assessment we had to “back out” each return from the system and then recommence processing. With the new system only being in use for a few weeks this proved to be difficult and it took us longer than we expected to rectify this problem.
The second problem occurred in the second week of April when about 140,000 cheques were not printed. Again, another change to the system had unintended consequences. Once we became aware of this problem cheques were printed and issued within one week.
1 CPT Global, Release—Income Tax Implementation Review, report to the Australian Taxation Office, August 2010.
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Conclusion
The Change Program was an ambitious and far reaching program for the ATO. Our people and the various contractors involved worked very hard for a number of years and we appreciate the supporting comments you have made in this regard.
We want to thank you and your staff for a comprehensive and thorough report of the Income Tax release and the ATO is committed to learning from this experience to further improve our ability to deliver major information technology reforms.
The ATO response on each recommendation is at Attachment 2.
David Butler Second Commissioner Australian Taxation Office
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ATTACHMENT 1:
INDIVIDUAL AND NON INDIVIDUAL TAX RETURNS — FLOW OF RETURNS WHERE PROCESSING AND REFUND ISSUED WAS COMPLETED
Processing Completed Refunds Issued
January 2010 84,853 * 56,697
February 2010 560,132 250,540
March 2010 573,135 413,322
April 2010 634,891 509,500
May 2010 1,150,043 594,836
June 2010 842,980 289,060
* Processed in old system (120,498 unprocessed returns were on hand at 31 December 2009) ATTACHMENT 2:
RESPONSE TO RECOMMENDATIONS
[The IGT has placed the ATO’s reponse to recommendations in Chapter 4 to reduce duplication.]
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